How You Can Fight Rising Interest Rates In Car Finance Loans

Car finance loans aren’t what they used to be a few years back. After a pleasant period of record-low interest rates, percentage points are slowly creeping up, and now they are around 7%.

With the approaching energy crisis and higher costs of living, the upward trend will probably continue for the rest of the year. As a result, the ownership cost will also increase and your capacity to buy a new car may decline.

However, there are ways to deal with hard times:

  1. Take advantage of manufacturer’s and car dealership’s fears – Consumers are not the only ones affected by today’s economic issues. If you don’t buy cars, manufacturers and dealers don’t make money. That’s why they are now offering incentives and cheap financing to raise their sales. Ask for these incentives but make sure to read the fine print and compare to confirm it is a good deal.

  2. Shop for more affordable cars – You don’t really need 600+ horsepower to get to work and back. When shopping for a new car, focus on your needs, not your wants. If you can pay for a used car, especially a Certified Pre-Owned vehicle upfront, do so and you’ll save thousands of dollars.

  3. Consider borrowing the money from a credit union – Credit unions often offer cheaper car finance loans than regular banks. Joining one isn’t complicated and you will also get to enjoy other benefits. Having your own source of financing also makes it easier for you to negotiate your new car price.

  4. Do your research – Know your credit score, which is key to what kind of interest rate you can qualify for, and shop around for auto loan quotes to know your options. Armed with that information, you can negotiate a lower financing rate with the dealer.

  5. Put off car purchases, if you can afford to – Although interest rates may continue to rise in the coming months, they may also go down. Watch how interest rates and incentives behave. Patience could save you thousands of dollars!

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