Post by Robert
Every evening news correspondent has been reporting on the low interest rates and its effect on the housing market. However, the same thing is happening to car finance. Auto loan rates have been dropping significantly over the last several years, in line with the general fall of interest rates overall. However, does that mean it’s time to buy a car?
The Pros of Buying a Car in the Current Financial Environment
There are a lot of positives to buying a car right now. For one, many dealers are giving great car deals to entice buyers onto their lots. If you’re going to need a new car in the next 6 months, it doesn’t hurt to start looking right now. You never know, you could negotiate the dealer to a really good price, especially if they are desperate for end of the year sales.
Plus, if you get a reliable car, it should last you for 5 years or more. This should get you through the uncertain economic times ahead, which could include rising interest rates.
The Cons of Buying a Car Right Now
There are two big disadvantages with buying a car that you need to consider: what are you going to do with your existing car, and how will you pay for it. First, you will need to sell your car, or trade it in. You need to know what you can get for it, and if it makes sense for your financial situation. Second, buying a new car, even if you get a loan or a lease, requires some down payment. Are you going to be able to afford this and still have an emergency fund?
The Bottom Line
The bottom line is that if you need a car – for example, if yours is getting old and requiring a lot of maintenance – now is a great time to buy a car. However, if your car is still in good running condition, you shouldn’t just go out and look because the deals are good.