interest rates

What Rising Interest Rates Mean For Buying a Car

Rising car interest rates over the next several months mean that now might be the last good time if you are looking to finance a vehicle

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At Clay Cooley in Irving, prospective car buyers are racing against both time and rising prices.

The auto industry has been heavily impacted by global supply chain struggles and a chip shortage that's caused some orders to come in months later than anticipated.

On top of the chip shortage, Clay Cooley COO, Chase Cooley, is anticipating that interest rates will spike which will lead to higher car payments with an increased impact on expensive vehicles and used car sales.

Cooley said dealerships have "the fewest cars [they've] ever had" and that "now is the best time to buy a car."

Cooley sees interest rates continuing to increase over the next several months. Right now, he feels you can still get favorable deals and that "used [car] values are still high so you still get a lot for your trade."

Mike Davis, an SMU economist, said that "the threat of an economic downturn is higher now than it's ever been."

Davis worries that the Fed, which controls short-term and credit card rates, is waiting too long to counteract the rising rates.

"If you're running up a balance on your credit card, try and pay it down as quickly as possible," Davis advised.

Davis added, "if you're thinking about a new car, new house, just understand, it's gonna be more expensive to borrow money for that."

Jodi Erickson, a potential car buyer opted to focus on paying down her credit cards rather than taking on any new financing under current conditions.

Erickson said rising rates are the reason she really hoped to get a deal done today.

"I knew that that was going to have an impact on my buying and I needed to finance and it was going to make a difference in how much I could afford which is why I really wanted this done before the banks made the change," Erickson said.

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