If You Need a New Car, WalletHub Says Now Is the Time to Hit the Gas
Itching for a new set of wheels? You might be wondering: When is the best time to buy a new car
Well, turns out now might be a good time to buy, according to WalletHub’s recently released auto financing report for first quarter 2018.
WalletHub reports that the car buying market seems to be currently tilting in favor of the buyer rather the seller.
“Interest rates for new cars are at one of their lowest point in the past three years,” WalletHub claims.
Still, rates will vary based on where you finance your vehicle.
WalletHub found the best interest rates for financing a new car tend to come directly from car manufacturers — with the average rate of 1.87%. Credit unions offer the next best deal — with interest rates averaging 2.61% for new cars.
National banks tend to offer better deals than regional banks, and regional banks tend to offer better deals than community banks or small banks.
Those who choose to purchase a used car will find similar trends. A credit union will likely offer the lowest interest rate, and national banks will beat out regional and community banks for the best interest rates.
However, interest rates for used cars will be higher than those for new models.
For example, the average interest rate for financing a used car at a credit union is 2.87% while the rate for a new car is about 2.61%. Financing a used car from a regional bank comes with an interest rate of about 4.73%, but a new car owner could get a 4.01% interest rate at a regional bank.
Finding the Best Deal
Choosing which car you want to buy is a personal choice, but WalletHub found some manufacturers seem to offer better deals and more transparency over others.
Of the 22 manufacturers WalletHub analyzed, Nissan, Hyundai, Mazda, Ford, Subaru, Toyota and Dodge currently offer 0% financing.
Car shoppers looking to lease instead of buy will find Toyota, Hyundai, Lexus, Jaguar, Mazda, BMW and Subaru provide the best leasing offers with interest rates under 4%.
WalletHub also looked at how transparent car manufacturers were during the auto leasing process and scored each using a 10-point scale. Infiniti, Mini, BMW, Mercedes, Honda, Volkswagen, Toyota, Nissan, Audi and Hyundai all earned a score of 6, the highest any manufacturer received.
Speaking of scores, one factor that will impact how much you’ll spend on a car purchase is your credit score.
Buyers with a fair credit score will end up paying about five times more in interest than those with excellent credit, according to WalletHub.
For example, someone with fair credit might pay $7,723 in interest over the life of a $20,000, five-year loan, while someone with excellent credit might pay $1,456 in interest for the same loan — a difference of $6,267.
Nicole Dow is a staff writer at The Penny Hoarder.