Zero Percent Car Loans Go Extinct but You Can Still Get Title Loans in Orlando
Two decades after General Motors‘ Keep America Rolling strategy introduced 0 percent financing on auto deals as a successful marketing tactic, these deals are now becoming scarce.
No-interest loans are disappearing at dealerships across the U.S. due to rising interest rates. In July, 0 percent financing accounted for just 6.9 percent of sales, the lowest since 2005, according to Edmunds. The share in June was 5.6 percent, half the level of a year before.
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Alternative Auto Loans
The rising interest rates will affect more and more car buyers, especially if interest rates continue to rise. Besides the decrease in 0 percent financing loans, the increase is impacting those most vulnerable to a tight borrowing market. Those with bad or no credit may soon be looking for alternative ways to finance auto purchases, especially if they can’t get a bank loan.
“Bank loan applications can stay in the pipeline for weeks, only to disappoint consumers at the end of the process when the bank delivers a rejection. When it comes to bank loans, the biggest currency in this recession economy is a good credit score, and if they don’t have that, then the chances of attaining loan approval at all – let alone in a timely fashion – are not good at all. Once banks are out of the question, though, borrowers still need money, and it can be quite difficult to find a place that will give them the cash they need immediately,” according to Embassy Loans, an online provider of title loans in Orlando.
Such loans may become increasingly popular if the Fed continues to raise rates.
Interest Rates are Likely to Keep Rising
Since the Federal Reserve has voted to increase its interest rate five times less than two years, it’s extremely likely that the U.S. will see continuing increases. After all, two of the increases came in 2018, with two more predicted, along with three in 2019.
Consumers increasingly are priced out of leasing loan terms that were affordable three years ago. According to Edmunds, buyers who got loans on vehicles in Q2 of 2018 could expect to pay an average of $5,477 in interest, up 21 percent from a year ago. It’s no wonder that those with spotty credit are working to clean it up and seeking backup sources of financing.
Author: Jacob Maslow
