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Cheaper auto loans mean now could be a good time to buy a car

Cheaper auto loans mean now could be a good time to buy a car
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The coronavirus lockdown may mean that the cars of most Americans are rather redundant at present, yet a general decrease in the cost of the best auto loans means that now may actually be rather a good time to buy a new car.  

Because of the pandemic putting people off any car purchases that they may have been planning to make, auto sales are some 35% down on a year ago, slumping to levels not seen since the recession of a decade ago. With no end in sight to the coronavirus crisis, there also seems little chance that people will be flooding back to showrooms in the near future.

For car dealers and manufacturers alike, there has therefore been little option but to compete for the buyers that may remain, and try and incentivize those who may be holding off on their car-buying plans to act now. According to lifehacker, the general asking prices of cars are still holding firm. However, with business so slow, a buyer will certainly have the cards stacked in their favor, whether trying to negotiate a higher price for their trade-in, a lower price for the new car they are interested in itself, or most likely both.

Where concessions are notable, however, is in the financing offers available on the best auto loans, with deals being enhanced on everything from 0% financing to deferred payments.

It is being reported that six or seven years of 0% finance is now being used as an incentive to get a sale over the line, while deferring the initial payment for 60 or 90 days is another popular bargaining chip too. Some car manufacturers, including Fiat Chrysler, Volkswagen and Kia, are even combining both offers in an attempt to persuade buyers to sign on the dotted line. 

Is it possible to buy a new car now? 

One concern may be whether people should actually be leaving their homes to buy a new car. However, the reality is that most of the car-buying process can now be done without so much as opening the front door, with auto loans and auto insurance both able to be easily completed online. For extra peace of mind, buyers might also consider searching out the best extended car warranties and even the best roadside assistance services from the comfort of their living room - essentially, you’re all set from the comfort of your sofa.

The one exception will be the all-important test-drive, although dealerships are usually willing to arrange home test drives and drop-offs. Some high-tech auto dealers may even be able to offer a virtual reality test drive, raising the question as to how long it will be before the trip to the car lot becomes completely avoidable altogether.

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With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.