Posts Tagged ‘Car Manufacturers’
When the prices of gasoline reached its peak over the three dollar mark last year, it changed the landscape of the auto industry. With more and more consumers wary of an impending increase in the prices of gasoline, fuel efficient small cars are now in demand. This resulted to lesser sale of SUVs and other large cars.
In this way, the price of gasoline changed the auto industry wherein car manufacturers are now focusing on the development of small cars which are commonly fuel efficient. There are still SUVs being introduced in the market for those who need the capability of these large cars for their lifestyle or business. There are also large trucks with hybrid versions which are aimed at those people who want a big car with good gas mileage. Aside from this, another aspect that the increased gas price affected the auto industry is in the sale of used cars.
Recently, more and more consumers are selling their used cars on the Internet rather than settling for a trade-in. This is because auto retailers are offering lower prices. The reason behind this is that they are still struggling to sell the large number of SUVs that consumers have been turning their back on at the onset of the oil price hike.
The trend in using the Internet to sell used car gained momentum last year as the prices of gasoline started soaring. Analysts argue that retailers are focusing on selling new SUVs which have seemed to lose its appeal on most car buyers.
By the end of last year, 34 percent of the used car sale market is attributed to personal sale of used cars. This trend will likely continue as there are still old vehicles that needs replacing because of the increase in the price of gas.
The use of the Internet as a selling tool is a logical step for consumers who want to sell their used cars. The Web is full of online vehicle stores which facilitates the sale of used cars. By using the Internet, consumers have access to a large number of people who are looking for used cars to buy. This influx of used car sale in the market has created a huge source of income for online vehicle stores.
The Internet is being used by used car owners as their own personal Pacesetter exhaust since this is where they release their used cars to the market. And while the trend has been going on for months, analysts say that the trend is just a temporary response to the increase in the price of gasoline. In the near future, when dealerships have taken care of the bulk of SUVs left on their stores, they can already offer good price for consumers who wants to trade-in their used cars.
While buying a used car you can not only save thousands of dollars in depreciation, taxes and factory costs, but also wind up spending more on your financing. As new car manufacturers lure buyers with 0% interest rates and no-money-down offers, it’s hard to find a better deal when you’re purchasing a used vehicle.
If you’re planning to buy a used car, keep reading for some financing tips that will save you money.
1. Shop Around for a Better Rate
If you need to obtain financing for your used car purchase, try shopping around for the best rate. While the dealership may often offer you a good financing option, you should to check with your bank and other lending institutions to see if they can do better.
Other car financing options that may get you a better rate include a line of credit, which can sometimes be as low as 5%, or simply offer a low-interest home equity line of credit loan from your lending institution.
A slight drop in the interest rate can save hundreds – sometimes thousands – of dollars over the life of the loan, so this is a worthwhile investigation.
2. Be Ready to Walk
If you’re obtaining financing directly through the used car dealership and you’re not happy with the offered rate, be ready to politely walk away from the deal. Most dealerships would rather lower their interest rate by a half point or full point than see a potential sale walk through the exit door – especially in tough economic times like today when gasoline prices are so high and car sales are low.
Additionally, if you are able to wait until the end of a month to buy from a dealer, you may have some additional leverage with salesmen who are under pressure to meet a monthly or quarterly quota.
3. Pay in Cash
The best way to save on financing costs is to avoid financing and credit all together. If you can do it, pay in cash.
Let’s say you’re buying a five-year-old Civic for about $10,000 – that can be saved up in a year at a rate of about $833 per month or two years at $416 per month. Rather than taking out a car loan, put that money in a high interest-yielding savings account and you’ll reach your goal even faster.
4. Pay it Off Fast
If you can afford to do it, the faster you pay off your car, the less you pay in interest and financing costs. While it would be unwise to stretch your family budget too tight in an effort to pay off your vehicle, you should avoid long-term financing that drags on for four or five years.
5. Refinance Down the Road
Let’s say you need a new used car this year but you’ve just put money in the house, perhaps had a baby, had a dip in your credit rating and money is tight. Well, you might accept a higher interest rate now, but in a year – once things improve – you should investigate the prospect of refinancing that loan with another lending institution that can offer you a lower interest rate.