Car Buying: Research and Caution are the Words of the Day
Wednesday, September 9th, 2009I’ve seen two figures today that make me stop and think about the business of car buying. First, automotive advertising for the first half of 2009 is down 15%. That’s not surprising given the amount of fat the car companies are having to trim from their budgets, but it also means people are probably not doing their “research” until they hit the showroom floor.
I can’t emphasize enough that in this climate you need to have a make and model in mind before you talk to the salesman as well as an idea of the available options and what you do and don’t NEED. Remember people, recessions aren’t about WANTS, they’re about NEEDS. Make your list, set your price, stick to it, drive a hard bargain on incentives and be prepared to turn around and walk out. They’ll deal. I promise. They’ll deal.
The other figure is a 21.2 percent increase in auto loans that are 60 days past due. That tells me people are still buying cars they can’t afford. Don’t do it! Credit is tight. The credit card companies, in anticipation of the new rules, lowered the credit limits for hundreds of thousands of accounts — in most cases informing the account holders after the fact. Your credit score has been affected, changing the ratio of what you make to what you can borrow. People who could get small loans 60 days ago probably can’t now thanks to those lower credit card limits. If you do have a loan, you may now be in a tighter situation than you realize. If you’re thinking about a purchase, run your credit report first. Don’t go in cold and trust someone else to interpret the numbers for you.
We’d all like to be driving something new, but now is probably not the time to do it. If you can afford an automotive purchase — do the research. If you can’t, or if your credit isn’t what it was six months ago — wait. Defaulting on a car loan isn’t going to do your credit rating any good and being without transportation isn’t a pleasant or productive situation. Don’t do something now that could alter your buying power for years to come.
Leave a Reply