Is This a Good Time To Buy a Car?

In the current economic climate, there is a lot of speculation about the logic of buying a new car. After all, the economy is considered to be so unstable it is doubtful whether there are any good deals out there. It’s also questionable whether anyone but the seriously wealthy can afford to sign off on a major purchase at this time.

The interesting truth, however, is that we are not being entirely honest about the real issue. We are all asking whether we can get a good deal on a new car when in fact we are mostly wondering whether we can find the means to purchase a car in an affordable way. If you cannot get approved for a good car loan, it can be extremely costly to buy a new car. That is, unless you are well prepared.

The best outcome for a new car purchase is of course approval for a car loan with favorable terms.

This is easier said than done because of the uncertain economic climate. Auto repossessions have increased by ten percent along with car loan delinquencies, which are also on the rise.

The good news is that the problems of the housing market, setting the trend for economic troubles, do not necessarily translate directly to car loans. The collapsing of the housing market has definitely caused problems in the automotive sector but several significant differences between home mortgages and automotive financing mean that the problems do not exactly correlate.

Perfect credit is still perfect credit when it comes to auto financing. Anyone with stellar credit should have little trouble getting approval.

Those with less than perfect credit may not be rejected entirely, but they will find themselves receiving a response that they will need to come up with more of a down payment.

It is particularly important to have a budget and know what you can afford. You also need to know your credit score, scrutinizing the details to ensure that everything is accurate.

One of the best ways to combat the changes to the market is to get pre-approved for a car loan through a bank or credit union even if dealership financing is something that you want to consider. Anything you can do to put yourself in a stronger negotiating position as a "cash buyer" will help you.

Although the credit market is reasonably tight and car sales are low, waned consumer confidence is not going to last. The economy is always cyclical and just like anything else, defined by ups and downs. Consumers are going to need to borrow more responsibly and live within their means but there are still some great car deals out there!