The economy is on the rebound, but things still aren’t great. So why are car sales so high in 2015? In fact, sales are so high that 2015 may end up being a record breaking year for cars sold and also for vehicle loans. Here are some possible reasons for this trend and, as a consumer, how you can use it to your advantage.
Car sales are hot! Learn how you can capitalize on this market as a consumer.
Looking at the Market
It looks like the auto industry may be experiencing a boom. In fact, May of 2015 brought a high of 17.7 million vehicles sold from dealership lots. This rise in sales may be linked to several factors.
First, more consumers are interested in the latest eco-friendly vehicle models and may be more willing to pay a higher price for those cars. Newer vehicles also offer features that aren’t available in older models such as smartphone syncing and more, making them attractive options for consumers.
Considering Loan Length
One recent trend in the auto lending industry is the lengthening of loan terms. According to U.S. Auto Loans, Sales, Keep Rising, the average loan term recently rose to five and a half years.
One factor that dealers and lenders are considering regarding this increase in loan terms is how it will affect the future auto industry. For example, will consumers who have recently accepted longer loan terms wait until their loans are paid off to purchase their next vehicle? If so, this could cause a dip in auto sales over the next decade.
As a consumer, the average increase in loan length means that you may be asked if you’d like to accept one of these longer loan terms as you finalize your car purchase. On one hand, a longer loan term can help lower your monthly payments and ease the financial burden of a new vehicle. On the other hand, it means you’ll be making loan payments longer and that you may end up paying more in interest.
Making the Best Decision
Depending on the market, things change for consumers who are in the market for a new vehicle. So, should you buy a car when sales are high or wait for the market to slow? The best decision really depends on your circumstances. If you need a new vehicle now, then now is the time to buy. If you can wait a few years, then you may be better off waiting to make the purchase, not necessarily because of the market, but because this waiting time could also be time that you save more money for a down payment.
Using the Market to your Advantage
Car sales are high. How can you use this market to your advantage? The good news for you as a consumer is that many car dealers are willing to negotiate on car prices to increase their piece of the large sales pie. If you have less than perfect credit, the high sales market may also increase your chances of securing a loan with a reasonable interest rate. Whether you’re purchasing a personal vehicle or a work car, compare pricing between dealers, consider several loan offers and use this information to make an informed purchase.
2015 is on track to be a record breaking year for car sales and vehicle loans. Use the market to your advantage by researching a range of loan options, by negotiating with dealers and by not settling for anything less than the best price on the vehicle you want to purchase.