Car sales become increasingly competitive
Posted on Wednesday, January 25, 2017 at 12:16:47 PM
If you are in the market for a new or used car, 2017 should be a pretty good year. Manufacturers continue to get more creative with their designs and the inclusion of modern technologies, while a healthy level of consumer spending is yielding some incredibly competitive deals on both new and used models. What's more, the automotive financing arena has grown consistently throughout the past few years, meaning that access to credit is at an all time high.
And it does not really matter what type of credit situation you have, as even subprime loans are looking healthy. One study from the American Financial Services Association stated that all major American credit bureaus are in agreement that subprime lending is stable today, meaning that even what once were somewhat risky accounts are being paid off consistently. So, suffice it to say that there is a lot to be excited about in the car buying conversation this year.
USA Today recently reported that 2016 saw the highest numbers of cars sold in a single year at 17.55 million, and all signs point to continued growth in 2017. According to the news provider, despite December marking a record for the average new car purchase price, $32,000, sales remained strong. There have been some increases in leasing as well. What's more, the source pointed out that manufacturers are increasing their breadth and value of incentives, with an estimated average of $4,000 in cash back per the latest data.
In terms of lending, car buyers can expect to pay higher rates on their financing programs, but not by enough to make the monthly payment too high to be attractive, USA Today noted. Add that to the fact that there are a lot of relatively young used cars on the market, and it becomes clear why the automotive industry is looking so good in the U.S. currently, which also translates to a strong economy.
If you, like many Americans, are looking to purchase a car this year, make sure you go into the process informed and ready to make a deal that will benefit you financially in the long run. In addition to researching vehicles and trying to get the lowest possible purchase price, you will also need to remember some of the basics of financing programs. For example, The Motley Fool urged car buyers to pay little mind to the monthly payments on a car loan, as they can be entirely misleading.
According to the website, the total price paid on the loan is the more important figure, and can be clouded by low monthly payments when really the interest rates are high and terms span out more than the current average of 68 months. There are plenty other matters involved in automotive financing programs, which is why speaking to a representative from your local bank can be such a valuable activity before purchasing a vehicle and singing onto a loan. Happy shopping!