Cars & The Coronavirus: What You Need to Know about Buying or Refinancing a Vehicle During COVID-19
We've spent months hearing
about how the coronavirus has impacted the food and service industry, fitness
facilities, and schools. But what about auto? While we were told to stay at
home in early 2020, Americans still needed to drive to and from essential businesses.
But the COVID-19 pandemic altered the business of cars. That new car smell is
now hand sanitizer or disinfectant; dealerships are offering home test drives;
and touchless delivery is now a thing of the present. But more importantly,
inventory on car lots has started to dwindle. Manufacturing plants can't churn
out vehicles as fast due to closures and furloughs. So what can you do to still
find good deals on a new car or refinancing options? Here are some do's to
1. Buy the car. When making a big purchase, our natural instinct is
to shop around. But with a lower inventory in the market, we might not be able
to do that. If you find a car you love, pull the trigger and buy it. You may
lose out on that deal if you shop around too long.
2. Have an open
mind. We tend to make checklists of
everything we want when making a big purchase. You know you want this brand,
with this all wheel drive, with this interior package—the list goes on. But
during this period of COVID-19, flexibility is key. Low inventory is making it difficult
to check all the boxes. If you're in the market for a new SUV, consider
different brands with similar features. Dealerships are offering a plethora of
deals that include deferred payment options and longer contract agreements.
Keeping an open mind can get you a better car in the long run.
3. Expand your
search. If you know what you want and
you don't need to test drive, call multiple dealerships from near and far and
have your car shipped to you! Research to see what deals dealerships are
offering. An auto mall from across the state could be offering the best
Not in the market for a new
vehicle but looking to refinance instead? It might be the right choice for you
if your credit score has changed or if you qualify for a better interest rate.
And right now, rates are low due to COVID-19. Refinancing can be a great
benefit if it's done correctly:
1. Do shop for
Chances are that interest rates have changed since purchasing your vehicle.
Since interest rates are low, it may be time to consider refinancing if you can
get a lower interest rate. Shop around at various lenders to find the best refinance deal that will
save you money.
2. Do consider refinancing if your credit has
improved. It may be
economically beneficial for you to refinance your auto loan if your credit has
improved since first purchasing your car. The higher the credit, the better the
loan deal you receive. So if you've paid your bills on time and haven't taken
out multiple lines of new credit since your original loan, your credit score
may be higher which will look good to auto lenders.
3. Don't extend the length of your loan. One of the options to auto
refinancing is to extend the length of your loan. However, if you're looking to
save money, don't go this route. While extending the length of the loan means
lower monthly payments, it also means an increase in interest which increases the
total price of the vehicle.
refinance at the end of the loan term. It's true what they say; the value
of the car drops as it drives off the lot. The older the vehicle, the less
value it holds overtime, making it harder to refinance. Since you do pay most
of the interest on the loan when you first purchase the vehicle, it is best to
refinance at the start of the auto loan.
you're looking for a vehicle loan or need to refinance, Telhio Credit Union may
be able to lower your monthly payment and help you save. Check out our loan options to see which one
is right for you!
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