Car Buyers: For Big Deals, Wait a Few Months

Consumers watching the U.S. debt downgrade, the plummeting stock market and the faltering economy may think this is no time to buy a car. But if you are among those who need a new vehicle soon, you may be wondering: Can I get a loan? Will rates be higher? What will happen to prices?

The news is somewhat reassuring. Analysts believe that as inventories rise and dealers need to clear out 2011 models for the upcoming 2012s, buyers will get the best deals of the year from October through December. And the experts at automotive web site Edmunds.com think financing will remain stable and available as well: “All market factors suggest that credit will remain available, that interest rates will remain stable and that incentives may help keep car prices low in the immediate future,” says Edmunds chief economist Lacey Plache.

Car sales already have slowed down since spring, although prices have remained high. Dealer inventories are likely to rise and prices fall as Japanese companies get back to full production after the earthquake and tsunami there and try to catch up for lost sales.

Here’s a closer look at the factors affecting loans, rebates and other deals, as well as new- and used-car prices:

Car Loan Rates

If you have reasonably good credit (a FICO score above 660), you should be able to get a loan. But with a lower credit score — say, below 620 — you may have problems. Edmunds economist Plache predicts car loan rates will not rise because they are tied to U.S. Treasury rates, which have remained stable or fallen despite the debt downgrade by Standard and Poor’s.

According to Yahoo Autos , recent rates were 5.73% for borrowers with FICO score above 720, 7.37% for scores between 690 and 719 and 9.40% in the 660-689 range. Be sure to check local banks and credit unions for rates lower than you may get at the dealership.

Rebates & Other Incentives

Special deals sponsored by the manufacturers may help you out on either price or loan interest rates. For instance, General Motors is offering a choice between those two on its 2011 Chevrolet Malibu midsize sedan (at right). List price starts at $21,975 before options, but it carries either a $2,500 rebate or 0% financing on loans up to five years.

The rebate goes to anyone buying the car. But to qualify for the 0% loan, you must be in the top credit tier (above 720). If you can get a good financing deal preapproved outside the dealership, your best deal often is to take the rebate.

student car loans – Students Can Now Have Their Own Car ...

Campus life of students sometimes involves lot of trekking and most students immediately think of owning a car for their daily conveyance. Owning a brand new car is perhaps not possible though. However it’s now possible to own at least a used car with many lenders generously offering guaranteed student loans. So what do you do in such a situation?

Research for student loans online will show many websites like that of Auto Driver offering auto financing for students without any conditions whatsoever. So ideally you must first shop around for lenders and banks willing to approve student car loans at reasonable interest rates while supporting bad credit or no credit rating. Since students may not have an opportunity to create a credit history yet. Some companies are wiling to even offer you blank check auto loan which would act like cash in your pocket at the dealer’s. A few tips might help you to work out your car loan.

Making a down payment to purchase your vehicle Lenders and car dealer financers know that car values decrease in value and looking for secured loans using the car as collateral is one option for college student auto loan. So they charge higher interest rates and do not allow for any defaults. In case of defaults the borrower runs the risk of the vehicle being repossessed so you are back to where you started. To avoid this save for at least 15 – 20% down payment and negotiate for better interest rates on the lower principal amount. Many students find this difficult as they are already struggling with a job and studies and cannot be patient to wait and save for the car they need immediately. Fortunately many companies have recognized this difficulty and offer pre approved auto financing. They help you finance your car if convinced of receiving regular monthly payments.

Payment services, a report on research conducted for BAI's Research Commission

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