Right now, you might be thinking it’s a precarious time to buy a vehicle, but it’s time for an upgrade. What should you do?
With auto loan rates rising, it can scare a lot of people from shopping as they sit back and wait for things to settle a bit.
That doesn’t mean you still can’t get a great deal on a car or truck that both fits your needs and is at a price you can afford. To do that though, you should do your shopping in the used car lot.
“If you really had to have a certain make and model, look at a used car. It can help with affordability, and you get a lot of the same benefits,” says Joe Pendergast, VP of lending at Navy Federal Credit Union.
It’s all about supply and demand. Over the past few years, people choosing to lease vehicles has reached an all-time high. That means when the leases are up, there’s always a flood of ‘gently used’ cars that make their way to the dealership. That bodes well for anyone hoping to get a good deal.
Vehicle prices have already seen a drop. According to the U.S. Labor Department, the cost has already started to drop, falling nearly 2% in April. Analysts expect that number will only go down as we enter the summer months.
Of course, most people want something brand new, as it offers the best of everything, from top-notch warranties to the latest technology to hit the market. Used vehicles aren’t that far off from buying brand new, but at a steep discount.
Most used vehicles are only a few years older, low mileage, and with the same great technology you’ll find in a new model. In short: you’re pretty much buying the same vehicle at a huge discount.
Trucks and SUVs often top the list as the most popular vehicles in the country to buy right now. Experts don’t believe that higher gas prices this summer will dent SUV sales too much. Navy Federal Credit Union says that the F-150 is the most popular vehicle their members get.
These types of vehicles are often higher in price, making it not uncommon to see buyers taking out 6-year loans. It’s always suggested that buyers stay on top of what they can afford and know their credit score before investing.
“Whether you’re buying new or used, don’t take the first deal you see. Be able to know that you can afford your car payment, as well as gas and maintenance,” said Pendergrast.
