Deciding when to get a car loan to elevate your journey can be tricky. With loan interest rates constantly fluctuating and vehicle prices going up and down, timing is everything. Elevate Your Journey: Car Loans by Handy Finance, by understanding a few key factors, you can determine the optimal time to obtain financing and get yourself into the driver’s seat.
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The Start of a New Year
Early in the year, especially in January and February, lenders and dealerships may be offering special rates and incentives to entice buyers. As they look to bolster sales numbers for the New Year, attractive interest rates or discounted prices could help you score savings or negotiate better loan terms. Just after the hubbub of the holidays, showrooms often see less foot traffic, making it a perfect time to bargain.
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Monthly and Yearly Sales Events
Dealers host monthly sales promotions and clearance events to keep inventory moving through the year. Savvy timing of an auto loan around these peak discount periods means stretching your dollars further. In 2024, popular sales months that lenders prepare special financing for include March, July, October, and November. When considering an end-of-model-year closeout, applying for financing early lets you take advantage of opportunities before they sell out.
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When Your Credit Score Is High
While timing around vehicle deals makes sense, the state of your credit score holds equal importance when lining up financing. Each time a lender runs your credit, as they will when you apply for an auto loan; the hard inquiry causes a slight, temporary ding. Avoid unnecessary hits by only applying when your score reflects your best range over the past two years. Checking your score a few months ahead ensures optimal approval chances and interest rates.
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When interest rates are low
Today’s interest rates remain at historical lows, though they edged up through 2022 and 2023. As the Federal Reserve battles factors like inflation, further rate hikes could come in 2024. Thus, capitalizing on the low rates still available offers huge savings over the long run. Even a small percentage difference alters monthly payments and overall loan costs significantly. Staying abreast of rate trends helps you finance on the most favourable terms possible.
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When Down Payment Funds Align
Coming up with enough cash to put 20 or 30 percent down brings many buyers financing too early. However, smaller down payments, like 5 or 10 percent, still get good rates while retaining savings as a buffer. Building up funds for a few months longer could position you to contribute more equity and reduce the amount you finance. That lowers loan costs overall. Test different down payment levels to find the sweet spot given your current situation.
While no universal perfect time guarantees the best auto loan, understanding the above factors provides key guidance. Being an informed borrower gives you the power to navigate the market strategically. With handy financing know-how, you can elevate your journey and end up with the vehicle and loan terms that best fit your needs. Keep the above criteria in mind, run the numbers to fit your budget, check your credit health, and track interest rates. Then you will recognize the prime opportunity to get rolling towards your next ride.
