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There are some pretty sweet 2019 automobiles hitting the markets right now.
Acura redesigned their luxury compact RDX. Subaru is doing it’s Outback one better with its the 3-row Ascent SUV. Pickup trucks have been re-tooled as well. The compact Ford Ranger gets a sporty new design, and Chevy has modernized its powerful Silverado.
And then there are the high-tech features!
Internet connectivity, which sounded space-age just a few years ago now comes standard on many models. Apple CarPlay and Android Auto puts a range of entertainment and navigation options at drivers’ fingertips.
But before you let these new models and technological advances bewitch you, understand the trends in 2019 auto loans so you can get a deal.
Trend: Slowing car sales
Why?: Millennials and urban dwellers are avoiding buying cars because they find Uber and public transportation sufficient. Millennials also put less focus on material possessions reflect status. They are not enthusiastic buyers of cars OR homes.
For You:Car manufacturers and dealers will offer more incentives. Car prices will stay steady from 2018 to 2019.
Trend: Lower loan origination fees
Why?: Cloud processing, automated application review, and digitized documents mean dedicated, in-house loan analysts now have to get jobs at Subway. It also means lower labor costs for lenders.
For You: In the competitive auto loan market, lenders have to compete on price. Therefore, the buyer has more power to negotiate the 1% to 2% loan origination fee.
Trend: Eight-year car loans
Why?: Cars are lasting longer. Toyotas and Hyundais tend to get the most praise for working well after 200,000 miles. According to autobytel.com, however, American models like the Chevy Impala and Buick LaCrosse hold up well into the 200,000 mile range as well. “Every new car today is built to last a quarter of a million miles,” explains Mike Calkins, AAA technical services manager. Taxi drivers brag that their Priuses make it to 600,000 miles!
For You: Car buyers who like to keep their cars for a long time can get more car for their budget with an 8-year car loan. While they’ll be in for more interest payments, using that money in other better-performing investments offsets auto loan interest costs.
Trend: Rising interest rates
Why?: With the economy thriving, the federal reserve has raised the federal funds rate eight times since the end of the Great Recession. It’s now at 2.25%. Most economist predict “The Fed” will bump rates up three more times in 2019 and then at least once more in 2020. With a federal funds rate at 3.25%, you bet the average auto loan cost will rise.
For You: The tricky thing is, as happens with homes, when auto loan interest rates rise, car manufacturers tend to compensate with lower prices. They know about how much their consumers can spend each month on a car payment. Still, when you go into the dealership, don’t be surprised that the 1% interest rates have disappeared.
Are you in the market for a new or pre-owned car? Better Business Bureau, A+ rated First Financial has auto loans for all credit types, even bad credit! Since 1996, we’ve helped arrange over 1,000,000 auto loans, some with approved amounts of up to $45,000. Take three minutes to apply here for a new or used car loan at the lowest rates!
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