Car Buying
The following link with can be extremely helpful when shopping for a new car. This site contains a total list of the makes and models that are currently offering incentive deals through cash back or low financing offers. Given that interest rates remain elevated, purchasing a car for 0% interest and leaving your money in a high yielding account can save you thousands over the life of the car.
https://www.realcartips.com/news/1051-best-finance-deals.shtml
Car buying has been an adventure, to put it mildly, since Covid began in 2020. Lack of inventory, microchip shortages, inflation, and high rates have made it very difficult to find and afford vehicles. Used cars have recently been selling for near (and sometimes above) what new cars cost.
Manufacturers and dealerships often offer incentive deals to push languishing inventory on their lots. This comes in the way of financing offers (0% APR for the first 36 months), cash back ($3,000 cash back) or both. These incentives pick up near the end of the year and at the beginning of a new year as new models hit the lot and dealers want to clear out old inventory.
Currently, the average monthly car payment for a new car is a painful $729/month. This is the highest it has ever been and is a combination of interest rates and inflation. However, inventory has begun to build at dealerships. Improving supply chain, decreasing inflation, and an end to the United Auto Workers strike have created a more promising environment for car shopping. However, high interest rates on car loans have made financing a car an expensive proposition.
Yet, interest rates remain high. When buying a car, taking a low interest rate loan and keeping cash in high yield savings accounts can reduce the total cost of purchasing the car. By following the link above you can see that there are significant incentives available on a variety of makes and models. In previous months, incentives were only available for the least popular vehicles. Scanning this list, however, shows incentives on the F-150 (the most purchased vehicle in the US) as well as a variety of Mazdas, Jeeps, and Nissans. I’d expect this list to continue to grow in the coming months.
If you aren’t sure what car to purchase, consider using this list as a starting point or check back frequently if you have time to wait. I know many of us do not like to carry debt on their cars, however, a 0% APR over 60 months can save you around $6,000-$8,000 in financing costs and allow you to keep money in high interest savings and cash accounts. With money markets yielding 5% or more, it makes sense to take low interest financing wherever you can find it.
The information given herein is taken from source that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities, LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but is not guaranteed by us as to accuracy or completeness. This is for information purposes only and in no event should be construed as an offer to sell or solicitation or an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without IFP's express prior written consent.