Last post on Nov 14, 2008 at 6:59 AM
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Car Buying, Car Financing, Car Leasing
#1 of 343 Buying a Car During the Credit Crunch
by kirstie_h HOST
Sep 30, 2008 (12:35 pm)
How has the economy affected your vehicle buying decisions and purchasing power? Are you waiting for an upswing before you buy? Or is this the perfect time to get a great price?
Let's talk about purchasing decisions, financing, and finance rates as we navigate the current credit crisis.
#2 of 343 Re: Buying a Car During the Credit Crunch [kirstie_h]
Sep 30, 2008 (1:02 pm)
This is really a funny market.
You have a combination of high gas prices,and the angst that produces along w/ banks getting more selective about lending and interest rates going up.
Plus, you have people coming back into the market who had low finance rates from banks 4-5%, and now they have to pay more.
I've seen a lot over the last 20 yrs, but nothing quite like this.
#3 of 343 Re: Buying a Car During the Credit Crunch [kirstie_h]
Sep 30, 2008 (4:04 pm)
"...is this the perfect time to get a great price..."
Just bring a brown paper bag filled with 100s down to the car dealer. Just be sure to wear clean socks because the salesman will be kissing your feet.
Don't have a bag of cash? Stay home, you shouldn't be buying anything.
#4 of 343 Market, in general
Sep 30, 2008 (7:23 pm)
More people are keeping what they have, rather than buying anything at all...
New car manufacturers? They're all going to miss their yearly sales targets--the only question is by how much. Unless they put up some monster incentives in the next three months, there are going to be some irate "stakeholders" (which seems to have replaced "shareholders" in the lexicon).
The finance companies are also going to be facing a glut of lease turn-ins, with no one to buy them, as lessees balk at the residual purchase price (and balk at the new, and higher lease prices on most cars) and downgrade to something a little less expensive.
Used car market? From what I've read here on Edmunds, there has been a slight uptick in used SUV values. I think that between the gas shortage in the southeast and the turmoil in the stock market, the SUV uptick will be more than cancelled out. 30+ MPG cars will command a premium, especially if they hail from Japan... Those are the only vehicles that most people truly "want" to buy right now. Most everything else will be sales to people who "have" to buy--lease is up, car broke down, stolen, totalled, etc... Those people will gravitate towards used models, but will still represent a smaller number of sales than is typical for the market.
Just my $0.02...
#5 of 343 Depends on the area
Sep 30, 2008 (8:41 pm)
Microsoft employees still pay inflated prices for their wheels in Redmond, Bellevue, & some parts of Seattle. Rancho Mirage isn't lowering their asking prices by much in the Used market. Texas and the SE seem to be a lot more economical.
#6 of 343 I wasn't really in the market in the first place...
Oct 01, 2008 (6:30 am)
but if I did need a new car, I wonder how hard it would be to get financing these days? Last time I checked, my credit score was something like 759. I always pay my credit card in full every month. Relatively tiny mortgage. Yet, about a month ago, I applied for a Shell Mastercard, so I could get a 5% rebate on gasoline, and got declined! Their reasoning was that I had too much open credit.
I have to admit, that I got a bit spoiled the only time I ever bought a new car. With my 2000 Intrepid, I got it for around invoice, and the term was 0.9% for 5 years. I just checked my credit union, and right now they're at 4.9% for 5 years. Or 4.64% for 36 months. Big whoop.
I hate the idea of paying that much interest to finance a car, but at the same time, the idea of paying cash scares me too. I guess I'd rather just get into a car in $300-400 increments, rather than lock away $20K or more all at once. So I guess that kind of catch-22 thinking is going to keep me out of the market for awhile.
#7 of 343 Re: I wasn't really in the market in the first place... [andre1969]
Oct 01, 2008 (6:35 am)
"I guess I'd rather just get into a car in $300-400 increments, rather than lock away $20K or more all at once."
Same here, especially since my cash buffer has dwindled in the past year.
I got approved for a car loan at Pentagon Federal Credit Union--4.75% for up to 60 months. I think if you have good credit, you can still get a loan.
Oct 01, 2008 (7:24 am)
last two car loans were at 5% or less. I wouldn't buy a car at a higher interest rate than that. Does that mean I am out of the car market for the next decade?
#9 of 343 Can't beat my rate...
Oct 01, 2008 (7:26 am)
...I got 0% financing on my DTS. Girlfriend had 1% on her LaCrosse.
#10 of 343 We're waiting
Oct 01, 2008 (9:17 am)
We came into a bit of money this past winter and paid off our current car. It is 8 years old with about 120k miles on the clock. Lots of issues last year to keep it running. This year has been better.
We would like a new car, but for the time being we are holding tight. Some poor choices, a job loss, and conscious decision to live on essentially one income has tightened our situation. We are eliminating some older debt, student loans and credit cards. Our credit is not top tier, but improving. We could pay cash for a car, but would rather not, and it doesn't serve us well right now to take out a new loan.
We rent and would like to buy a house. We have not been in a hurry. We are closely following what is going on there. No new car loan for us until that happens. Maybe within the next few months. On the plus side, we work in the public sector in education, and that opens up a host of attractive programs.
Credit crunch is a limiting factor, but not a prohibiting one.