Planning to buy a car? Are the Labor Day sales tempting you?
Auto-industry experts are predicting lower sales this year compared with 2015, so car buyers are likely to have negotiating power with dealers, WalletHub, a personal-finance website, said in its “2016’s Labor Day Auto Financing Report.”
The report compares auto-loan and -lease offers from more than 150 lenders to help buyers find the best car deals.
- Interest Rates:For new cars, interest rates are at their lowest point in the past three years, with the average new-car loan today charging 17 percent less interest than the average used-car loan.
- Credit standing: Buyers with fair credit will end up spending about six times more to finance a vehicle — about $6,671 in additional interest payments over the life of a $20,000, five-year loan — than consumers with excellent credit.
- Financing sources: Consumers in the market for a new car should begin their search for financing with car manufacturers, rates at 51 percent below average, and credit unions, rates at 26 percent below average. Secondary options include national banks, rates at 1 percent below average, and regional banks, rates at 35 percent above average.
- Transparency: Car manufacturers continue to lack transparency when it comes to leasing offers, with the average automaker receiving a WalletHub Transparency Score of 4.68 out of 10.
Before going to a dealership, buyers should review their free credit score to find out the types of rates they’ll qualify for and use a Car Payment Calculator to determine their car-loan payments and pay-off times.