Whether your summer plans include weekly trips to the drive-in theatre or a cross-country road trip, your current set of wheels might not be up to the task. But after more than a year of financial uncertainty, buying a car right now may seem risky. Spoiler alert - it looks like the economy may be the next summer blockbuster. Now might be the perfect time to grab your ticket and hop into a new ride.
Here are five reasons to shift gears and head to a dealership this summer.
- Interest rates are still at record lows.
Offsetting the steady rise in prices are the record low interest rates available to qualified buyers. As the economy makes a comeback, interest rates are expected to remain low until 2023. However, there are no guarantees when rates will increase or by how much. Rock-bottom interest rates make purchasing a new or used car this summer more affordable. Low rates typically result in lower monthly payments and lower overall payments during the loan term.
- You're feeling the stimulus effect.
Delayed vacations, more meals eaten at home, and several rounds of federal economic impact payments might have given your savings account balance an unexpected boost. A recent analysis found that U.S. households saved more money with each subsequent round of stimulus payments. These funds could be used as a down payment on a new or used vehicle. The more money you put down, the less you'll need to borrow.
- Prices will likely rise.
Similar to the housing market, a limited supply and large number of ready buyers drive up prices. Car manufacturers can't keep up with the demand for new vehicles right now because of the shortage of microchips, a necessary component for today's relatively high-tech rides. This leaves consumers with a smaller inventory of new and used vehicles. Since no one knows when the shortage will end, buying a car now could help you avoid paying higher prices in the next few months.
- Dealer incentives might disappear.
A limited vehicle supply could also mean fewer deals and buyer incentives. According to J.D. Power, dealer incentives have dipped by 7.5% from where they were in April 2020. Despite higher prices and fewer incentives, consumers still made April 2021 a record-setting month for new car purchases. With new vehicle sales showing no signs of slowing down, there's little need for dealers to offer special deals or buyer incentives.
- Your trade-in might be worth more.
A reduced new car inventory is fantastic news if you're looking to trade up as many dealerships still need to fill their lots with used cars and trucks. It's possible to trade in your vehicle today and receive more than you would have at the same time last year. If you were one of the millions of Americans who drove less in 2020, your vehicle might have a higher resale and trade-in value thanks to the lower odometer reading and reduced wear and tear it's been through.
Set your wheels in motion with a low-interest rate Logix auto loan. With rates starting as low as 1.24% APR for new vehicles and 1.49% APR for used vehicles, you could be behind the wheel and cruising down the highway sooner than you think.
Plus, with our Relationship Rewards Program members can get a loan as low as 0.99% APR for the first time ever!
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*Logix Federal Credit Union is not affiliated with any of the external sources referenced in this article, and is a separate entity.
New Vehicle Loans - As low as 1.24% APR (Annual Percentage Rate) is our best auto loan rate on approved credit and up to 125% financing on New Vehicle purchases and refinances from another institution, for a maximum 36-month term, and includes a 1% discount for Automatic Payment (AutoPay). Rate subject to increase if AutoPay is discontinued. Monthly payments at 1.24% APR for a 36-month term are estimated at $28.31 per $1,000 borrowed. “New Vehicle” means the current and prior model year with less than 10,000 miles.
Used Vehicle Loans - As low as 1.49% APR (Annual Percentage Rate) is our best auto loan rate on approved credit and up to 125% financing on Used Vehicle purchases and refinances from another institution, for a maximum 36-month term, and includes a 1% discount for Automatic Payment (AutoPay). Rate subject to increase if AutoPay is discontinued. Monthly payments at 1.49% APR for a 36-month term are estimated at $28.42 per $1,000 borrowed. “Used Vehicle” means the current and prior model year with 10,000 or more miles, and any earlier (older) model regardless of mileage. This offer may be valid for private party (person to person) purchases. “Classic Cars” are subject to additional restrictions.
Advertised rates and financing are based on creditworthiness and may not be available to all recipients; other conditions may apply. Refinance of existing Logix loans excluded from this offer unless you take a $5,000 cash out (must meet our loan to‐value requirements) or pay a $249 fee. Actual interest rate offered may be higher and a down payment may be required depending on applicant’s credit rating and other underwriting factors. In some instances Logix may require borrowers to purchase Guaranteed Auto Protection on new and used auto loans; maximum 17.99% APR.
Borrowers may elect to defer the first payment due date for up to 90 days from loan funding date, subject to credit approval; interest will accrue during the 90-day payment deferral period.
Logix finances vehicles purchased through franchised dealerships only (those affiliated with a major brand such as Ford, Chevy or Toyota). Auto loans are available only in AZ, CA, DC, MA, MD, ME, NH, NV and VA.
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Please contact Logix at (800) 328-5328 or visit www.lfcu.com if you have any questions about this topic or would like to consider opening an account.