SHOPSMART AUTOS – CUSTOMER INFORMATION – AUGUST 15, 2020
SHOPSMART AUTOS – CUSTOMER INFORMATION – AUGUST 15, 2020 Is Now the Right Time to Buy a Car? (Part 2) If You Can Buy New, Be Sure to Get a DealDespite the pandemic and economic uncertainty, this might be the perfect time to buy a new car. To entice consumers worried about job security—and to clear out an inventory glut due to slow sales—car manufacturers and dealers have pushed low-interest and 0 percent financing and loan terms of seven years and longer for new cars, with initial payments sometimes deferred by two or three months. Other common incentives include cash back or deep discounts off the manufacturer’s suggested retail price (MSRP).
In conversations with dealers, analysts, and other industry insiders, Consumer Reports found that dealers this spring had about a four-month supply of vehicles on hand—the norm is one or two months—so they’ve generally been willing to accommodate potential customers. According to data from TrueCar, the average savings below MSRP was about 10 percent in April compared with 8.6 percent at the same time last year. For example, Chevrolet was offering up to $8,500 cash back on certain Silverado pickups, in addition to 0 percent 84-month financing or 120-day payment deferments. Subaru was offering 0 percent for 63 months. Jeep was offering $3,250 cash back and 0 percent for 84 months on certain Grand Cherokees. There are also deals at local individual dealers.
In general, CR’s experts advise caution in taking out long-term loans, though in the right situation they can represent big savings over time. By stretching out the loan terms without additional interest, you can buy more car while keeping monthly payments the same or lower. But you should remember that at some point over the course of the loan, the car will be worth less than what you owe. In the event of an accident that totals the car, you could end up still owing money on the loan even after the insurance payment. The idea behind the deals and special offers is to increase consumer confidence during a time of economic uncertainty. For someone who can keep a vehicle for seven or eight years, a longer-term loan at 0 percent can be beneficial. But consumers who switch vehicles every few years might be better off with a lease. Consumers who take out 0 percent loans on new cars can come out ahead if they invest the money they would have spent on interest payments in something that could gain interest or something like a mortgage that would lower financial liability. Make It A Champion Day!
Tags: 2019 Subaru Forester Touring, 2020 BMW iX3, 2020 Chevrolet Suburban, 2020 dodge charger, 2020 EQC, 2020 Ford Super Duty, 2020 Honda Pilot, 2020 Kia Optima, 2020 Kia Soul, 2020 Lincoln Aviator
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