Sep 05, 2013 Phil Burgess
Though the economic recession affected the U.S. automotive industry extremely negatively, manufacturers and dealers have experienced a resurgence in sales throughout the past year. One of the most influential aspects in this resurrection has been the ability to offer consumers new and alternative auto loan programs, such as pay where you buy.
In addition to the efforts of alternative financial services providers and used and new cars sales companies, the federal government has also worked to stimulate growth in the industry through a variety of programs. With manufacturers in the United States working to develop the most efficient vehicles at the lowest cost to the consumer, this industry is very much a buyer's market.
Dealers pushing sales
Fox Business recently explained some of the finer points of automotive loans that come directly from the dealership selling the car, which has become widely popular across the nation. This trend was largely the product of dramatic drops in access to credit among consumers and businesses that were symptoms of the larger financial crisis, when traditional institutions were not able to disburse loans.
According to the news provider, the car dealerships essentially act as a facilitator of the financing program, contacting various third-party lenders to ensure that a potential buyer gets the credit they need to finalize the purchase. This has a much higher success rate, as dealerships will often have far more pull with a financier than the average consumer, especially when the firm does a lot of business the with lender.
The source explained that consumers should be on the look out for the dealerships which offer the most competitive rates, while companies should be working to keep interest as low as possible to maximize financial gains. Since the dealership might be working as the middleman, owners will need to work with the third-party lender to ensure good rates for customers.
Alternative financial services step in
Consumers now have a wider variety of options when it comes to automotive borrowing than ever before, especially as the alternative lending sector expanded substantially in the wake of the Great Recession. Though traditional lines of credit are becoming more accessible, all car buyers should consider looking into alternative auto loan programs to ensure that they are getting the best possible deals on the debt.
Through thorough research and plenty of planning, car buyers can maximize the value of their automotive investments.