Who's buying a vehicle before the Fed increases interest rates more?

[dutch_henry]

I'm in the auto finance industry, specifically setting interest rates. A 25bps increase by the Fed isn't going to have much of an impact. The drop off in car buying has lenders competing for the smaller pool of business, and despite the increase in the cost of funds, not all of that is getting passed on to the consumer. There will be more constraints on the overall structure of the deal right now in this current market (more cash down reqd., more stringent PTI/DTI/LTV, etc.)

Helpful analysis, thanks

 

[pirogue]

If you decide to buy your credit score will have much more of an effect on your interest rate than the fed funds rate. Best thing you can do is work on increasing your score and cleaning your credit report.

Exactly. I bought in October, and the salesman told me I got a lower rate than he’d seen in a long time.

 

[philos]

If you’re looking to get a Toyota, go ahead and put a deposit on one and it should be here around 2035

 

[tony]

Question and I probably know the answer:

My new ranger is shitting the bed and I want out of it soon as its fixed.
I trade towards something the dealer places my trade value towards the loan I already have and then I pay the difference plus the negotiated price of the "new vehicle?
Makes me seriously sick to even as this as I pay off my vehicles. This thing is having electrical issues and I'm sure it will be forever.
What about these car buying services?
What I'd like to do is sell/trade this one and get an old beater 4wd truck or suv for a year or so.

 

[butcherboy]

My truck is 20 years old now. I’m ready for something else but the price has definitely stopped me. Problem is I’ve dumped 5k in repairs the last two years into this truck and there is more to come. I would definitely keep it as run around truck to work and back. I live 1.5 miles from my meat plant so not a big deal to run a “Mater” truck. It just stinks when it’s in the shop without a third vehicle.

 

[fmyth]

Question and I probably know the answer:

My new ranger is shitting the bed and I want out of it soon as its fixed.
I trade towards something the dealer places my trade value towards the loan I already have and then I pay the difference plus the negotiated price of the "new vehicle?
Makes me seriously sick to even as this as I pay off my vehicles. This thing is having electrical issues and I'm sure it will be forever.
What about these car buying services?
What I'd like to do is sell/trade this one and get an old beater 4wd truck or suv for a year or so.

Get an online purchase offer from Carmax, Carvana or one of the other big buyers and see if its enough to pay off the outstanding loan.

 

[fmyth]

If you’re looking to get a Toyota, go ahead and put a deposit on one and it should be here around 2035

I guess it depends on what model Toyota you want and where you live. A few models like the Hybrid Rav4 and the new Sequoia are still bringing a little over MSRP here in AZ but Tacomas, Tundras, Camrys, Pirus are going for MSRP and under. My buddy just got a written quote for a new Taco 4dr 4x4 TRD Sport for 5% under MSRP with no add ons. I think the total out the door is a little over 37k.

 

[philos]

I guess it depends on what model Toyota you want and where you live. A few models like the Hybrid Rav4 and the new Sequoia are still bringing a little over MSRP here in AZ but Tacomas, Tundras, Camrys, Pirus are going for MSRP and under. My buddy just got a written quote for a new Taco 4dr 4x4 TRD Sport for 5% under MSRP with no add ons. I think the total out the door is a little over 37k.

I am looking at a 4Runner and I believe I can get it for about 3 pints of blood and a blank check

 

[MattB]

The fed fund rate does not change auto interest rates. Treasury bonds have a lot more to do with rates for loans.

The Fed funds rate and 1-year treasuries rate correlate really highly with one another, so…

Changes in fed funds may not affect rates from captive finance companies, but if you are looking at an auto loan from a bank, credit union, or independent finance company, increases in short-term rates will absolutely influence loan rates (mid-term rates more so presuming the lender match funds).

How Might Increases in the Fed Funds Rate Impact Other Interest Rates?

A rising fed funds rate means other short-term interest rates would increase. But what about the impact on mortgage rates and Treasury and corporate yields?

www.stlouisfed.org

 

[philos]

OK-this is a bit of a hijack on this thread but here goes.

There are several factors that influence loan rates. There are short term barometers and long term aspects of the economy that impact rates. On mortgages the best short term indicator (as in day to day) is the 10 year treasury yield. (It is the TNX on Yahoo finance.) If you do a graph of the 10 yr yield and a graph of the average 30- year fixed rate conventional mortgage and overlay them you will see a very close parallel for 40+ years. ARM loans are a bit of a different animal

Auto loans, Personal loans & HELOCs are typically more impacted by prime which is impacted by the feds funds rate. There are numerous other factors that can sway rates but one thing to remember is this. No matter what the financial indicators are, a lender can alter their rates/pricing if there appetite for a specific type of loan is aggressive. If a credit union has a surplus of cash but a shortage of new members they may offer under market auto promotion rates to gain new memberships.

If financing is part of the equation in your buying decision you should shop around and call smaller banks and credit unions and even ask the dealers what they have to offer. Sometimes there are financial incentives for dealers if they send ABC bank one more client this month or this quarter.

Now just go buy that Prius and get a 3 inch lift and some 35's and you are good to go.

 

[fmyth]

I am looking at a 4Runner and I believe I can get it for about 3 pints of blood and a blank check

If you are serious about buying one go to this link, read carefully then scroll to the bottom for current available inventory before you text the broker. You'll pay a $750 broker fee if you use this guy but you'll get a 4 Runner under MSRP. Looks like he has 2 coming in May but he updates this thread often.

🛻 MARCH TOYOTA! All states! DEALERS NATIONWIDE! Deals below invoice! Tacos $235 TUNDRA from $375! $5700 off!

More Toyota inventory under msrp! Text Jim 215-359-6836

forum.leasehackr.com

 

[keller]

I'm going to wait for the repos to start rolling in. You can already see the cracks showing in autolending. Let's see if the used market softens up for some of these trucks that are 1 - 3 years old and get hooked.

I thought this when Obama did the cash for clunkers. I am a 33 year dodge tech. Drained the oil and poured Obama juice into the engine and let them run till they quit.. on alot of vehicle's that were in way better shape than what I was driving. Figured I would be able to pick up a new ride when they quit making payments. It never happen...people adapt

 

[*zap*]

no loans for me...

 

[Laramie]

Just got an offer in the mail today for 0% on a new truck. I'll be passing...

 

[def90]

Depends on what vehicle you want.. Ford has 0% for 36 month financing on F150’s right now.

 

[Clownbuster]

I needed some quick.depreciating assets, so I bought a Jeep Grand Cherokee SRT, a GMC Denali 3500HD, an excavator, and a 14k dump trailer. If Im goin down, I'm goin down spending...

 

[Wrench]

Here's another thing to consider. There's still vehicles from one and two year old models waiting on chips, relays and such.


Just because you can buy it doesn't mean owning it will be fun.

There's something to be said about being able to source parts, used or new.

 

[MallardSX2]

I have over 200 on my cummins. I will keep it humming along until it is dead. Then I will replace whatever I need to replace. It was and is the last new vehicle I will ever buy. They have just gotten too expensive.

I could literally buy 1 house (with land) or 2 trucks....

It makes no sense.

 

[dtrkyman]

Think I just saw Chevy offer 0%. May have to give them your first born to get it?

I will keep milking my Grand Cherokee along, no major issues, spent $1500 on repairs over the past couple years, not counting brakes and tires which every vehicle needs obviously at some point.

I am at 192k and will probably spend $500 on it this spring prior to Turkey season.

 

[Hun10-freak]

I still have a 2007 Tundra with 130k miles, I know it's time to get a new truck but the 2023 will cost me around 63k... I don't mind buying used but a 2021 Tundra is basically the same as my 2007. I'm not sure what to do.