This may not come as a shock to those of you who have been shopping of late for cars and financing for those cars. However, since I have not shopped in earnest for the former and never shop for the latter, I was floored…
I was talking to a guy the other day who will remain nameless but whom I trust implicitly; he wasn’t BSing me. He had just bought a (slightly) used car and had no intention of borrowing any money to pay for it. However, when the dealer offered him a loan at (Get this.) 2.25%, and practically begged him to take the money, he felt compelled to borrow at least a portion of the purchase price.
2.25%???!!!!
Note that this wasn’t some kind of incentive deal; this was the rate at which the lender with whom the dealer was working was lending money on cars.
So I asked my friend what term we were talking about. He said it didn’t matter. The lender would have let him borrow at 2.25% for 36, 42, 48…up to 72 months.
2.25% for 72 months on a used (albeit very nice and not inexpensive) car???!!!!
I have long felt that the go-go car sales we have seen of late were largely the result of very cheap and available money; note my 4/25/13 piece IMPORTED FROM DETROIT: MARCHIONNE BETTER BE AS FAST AS A CHRYSLER 300 SRT 8 in which I said
All this talk of pent-up demand and the age of the fleet has some surface validity, but you can be sure that if money were not so cheap and readily available for vehicle financing, and payments thus so low, people would be able to satisfactorily, and perhaps happily, drive their old cars for many more miles, given how well cars are built nowadays. In other words, if financing cars were not so cheap and readily available, so called pent-up demand would stay pent-up.
News of this very cheap and very available money, even to a guy, like my buddy, with stellar credit, only confirms my suspicions that
- Cheap money is propping up the car market, just as it is propping up the housing, stock, and bond markets.
- We may be in for some rough time when (if?) the Fed ever pushes itself away from the table, even if ever so slightly.
- While student loans remain the most likely candidate for the next big blowup (See my
Nice I also share with you something hope this helpful for you my friends. If you are in the used car buying market, chances are good that you have been very careful about looking around at what used cars are currently on the market. You may have even drawn up a budget in order to determine what kind of used car you can really afford to buy. No matter what kind of used car you're in the market for, we are here to help you get the best rates and used car packages for your needs. Check it out thanks.
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Yeah! really nice blog. I really enjoyed reading it. Thanks for sharing.
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When you're dealing with car loans, it's better to know first your financial capacity to pay the debt. In this case, paying won’t be a burden. There are times that you have to look for a good company that can give you a great deal in financing your car, someone who’ll help you all the time until you've fully paid the loan. Financing your car isn't all about taking your money, but something about achieving your dream car. :)
ReplyDeleteThanks for reading and commenting, Ashley. I only wish that more people would follow your advice and know their financial capacity before borrowing to buy a car.
ReplyDeleteThe implication of my title is not that the lender is taking the money but, rather, that, in today’s car loan market, the lender is practically begging the borrower to “take my money…please.” My titles are meant to have several interpretations…and to draw people to the site, which it did in your case!
Again, thanks for reading and commenting, Ashley. If any of my readers are in the Ann Arbor area and are interested in an Infiniti (a fine line of cars, by the way), I hope they will look you up.
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