High interest rates on auto loans are making it difficult for car buyers to keep up with monthly payments. According to auto information site Edmunds, the percentage of new car buyers with a monthly payment over $1,000 rose to an all-time high of 16.8% in February, and rates are expected to rise even further. To survive these punishing interest rates, buyers are advised to boost their down payment, re-evaluate pre-orders, consider trading down if necessary, and pay attention to dealer incentives. However, if buyers cannot afford the monthly payments or down payment, it may be best to wait until they can or look for more affordable options.
- Boost the down payment: If possible, consider putting down more cash to avoid high-interest-rate hell.
- Re-evaluate your pre-order: Buyers who put down deposits on cars during the pandemic when new cars were scarce may no longer be in control due to spiking interest rates and cheaper used cars.
- Trade down if necessary: It may be time to admit that your eyes were bigger than your wallet and swap your current car for a more affordable one.
- Pay more attention to dealer incentives: Look for cars with manageable, subsidized interest rates, and don’t focus solely on the newest models.
In conclusion, the feeling of driving a new car off the lot is hard to beat, but the first monthly payment can be a punch to the wallet. With interest rates squeezing buyers’ wallets, it’s more important than ever to consider ways to save on car payments. By following these tips, car buyers can make tough decisions and avoid high-interest-rate hell.
