2013 Car Loan Interest Rates: What’s Up…or Maybe Down?
What’s up in the automotive industry this 2013? Or maybe the question should be what’s going down, literally? Financial analysts and the Fed said it themselves that the interest rates this year will continue to go down, and this trend will through until the middle of 2015. What’s really happening? Well, the Fed said that interest rates are not going up until 2 years from now until the unemployment rate wanes to at least 6.5 percent. Thus, rates are low today—and in the next 2 years—in lines of credit, mortgages, and car loans.
This year is undoubtedly a great year for consumers. However, it may not be exactly the same for savers and those who rely on fixed income.
Nevertheless, 2013 is still a good year especially if you’re looking to buy a car. Bankrate.com has been monitoring and reporting on week-per-week car loan rates and as of this writing, the rates are still at a record low. Auto loan rates are 4.12 and 4.71 percent for a 60-month new car loan and 36-month used car loan, respectively. The average rate for a 48-month new car loan is 4.04 percent, according to Bankrate.com data.
Aside from enjoying lower rates, what other things make this trend so great for car buyers like you?
For one, lenders and dealers are competing for your business. In that case, the tendency is that they would be willing to lower their prices or rates or make their offers better just to get car shoppers in a deal. So, it may not be that hard for you to find an affordable car deal especially if you’re working around a tight budget.
Another thing is you can save more money in your car purchase. Many do not realize this but interest rates powerfully impact car payments. Higher interest rates would make a really expensive car purchase while low interest rates can minimize the cost of buying the car.
The next thing may be more beneficial to the overall economy and the automotive industry than to consumers. With low car loan rates, auto dealers and manufacturers can expect an increase in car sales this year. Since car loans are generally more affordable now, car buyers are more confident to purchase a car, even those with non-prime credits. In effect, this can further help improve the overall economy of the US as the automotive industry is deemed as one of the key players now in helping the US recover.
However, don’t get too excited and happy about the low car loan rates this year. Don’t forget that the actual interest rate that will be charged you by a lender will depend on more than a couple of things: credit rating, loan amount, down payment, and loan term, among others.
Your credit rating largely determines what kind of interest rate you will most likely get. So, it really helps to pull out a copy of your credit report before you go to a dealer or lender. If you have a good credit, you can enjoy a really low interest rate. However, a bad credit will always get you a higher interest rate. Therefore, in order to make the most out of this season of low car loan rates, strive to keep a good credit.