Low auto-loan rates lead to a better economy and more new cars on the road
The nature of car loans has changed in the last few years. With the economy on a downward spiral and recovery only a buzzwords, car loans are now as low as they have ever been.
This low-interest rate has helped car sales jump 9.5 percent, the fastest pace since 2009’s “Cash for Clunkers” program. To continue to help spur sales, many of the major auto manufacturers are offering zero percent down on many of their top-selling models.
The rise in-car sales does nothing but help the American economy slowly crawl back from the brink. There are other benefits to the car buyer as well such as customers with lower credit scores not being overlooked by auto loan companies. Car purchases by those with less than sterling credit has risen twenty-six percent in 2012. This is a nineteen percent increase over car sales to those with sterling credit and a great credit history.
The automotive sector is on the rise. Auto financing is widely available and becoming more affordable for those in need of a new vehicle. Auto financing rates are improving faster than home mortgage rates are falling, which explains why auto sales are on the rise and housing sales are not. This helps customers look to buying car instead of moving out in to a new building or home.
This is a buyer’s market for vehicles. If a consumer has the money, it is a good time to go out and purchase a vehicle. Sales are abundant and the rates of auto-loans are low. In September, light vehicle sales topped 1.15 million, an increase of 9.5 percent over the previous year.
The industry is trending towards 14.5 million units for the year, the most cars sold since 2009. Dealers and automakers have helped spur these sales by offering various incentives to trade older vehicles in for newer models. Dealerships will acquire old loans and incorporate the payments in to a loan for a new car, prompting many to purchase new vehicles.
Because of this buyer’s market, Toyota has taken the lead in the industry. The various programs and incentives that Toyota is offering have helped the industry, as a whole, increase sales.
There has been a great boost of thirty-six percent over the previous years, with the Toyota Sienna minivan, Toyota Corolla compact, and the Toyota RAV 4 SUV leading the sales pack. These three vehicles are one of seven that Toyota offers for zero percent interest.
Auto deliveries for the year have topped fifteen percent as well, climbing to 9.5 million new cars at the dealerships and on the road. The trend towards over fourteen million car sales is the best since 2007.
A survey of banks shows that the most common rate for a forty-eight month car loan sits at 4.87 percent. This is a drop from 7 percent since before the fed dropped the target interest rate to zero in December of 2008.
One in 10 auto loans written in August had zero percent interest. This combines with the rate of auto loans that fell to 4.1 percent in August, the lowest of the year. The rates have dropped so low that this is the best time in five years to buy a vehicle.
Analysts are saying that financing a vehicle has never been easier. With historically low rates and automakers willing to cut deals, financing a car is the way to go. Since the fed is being aggressive with their economic policies, this helps the auto industry move more units.
Applying for a loan isn’t a stress inducing undertaking right now. With auto dealerships eager to move their inventory and Auto manufactures tossing in many incentives, companies specializing in auto loans are feeling a bit generous.
Having a few black marks on the credit rating no longer is a reason for an automatic denial. This attitude is helping customers feel more confident when purchasing a vehicle.
The car industry as a whole is improving. Companies like Toyota, General Motors, Ford, and Chrysler have increased sales during 2012. This is up from the near disastrous sales from only four years ago.
The auto industry has helped prop up the slow economy, with the money from car sales being used to help keep many with jobs. This is a bright light in an otherwise dark time. The ebb and flow of the last half decade is starting to look up for auto manufacturers and dealers alike.
The world is bright for those in the vehicle industry. New cars are being sold by the millions, customers are flocking back to auto dealerships, and the American car culture is in full glory. This has helped start a bit of a car renaissance in the USA. With car loans at record lows and bad credit not keeping a customer from buying a car, here’s hoping the trend continues.
Article by Australian car loans provider, 360 Financial Services