As we entered 2020, the average cost of used cars sold in the US stood at a figure of around $20,000. Compared to that, new cars came at an average price of almost $38,000. People were still buying vehicles from both groups, given their price difference, but the coronavirus pandemic brought about a stark change. Suddenly, unemployment shot up from a modest rate of 3.5% to never-seen-before figures. The government stimulus fund ran dry in a matter of weeks. Buying cars became a questionable decision as financial sustenance started to hang in the balance.
Yet, many states have allowed car dealerships and buy here pay here car lots to function as usual, terming vehicles as essential commodities. In states that did not allow dealerships to stay open, car buying shifted to the online world. That suggests that buying a used car is definitely possible during the pandemic but you can no longer rush into the decision given the world’s current economic state. You must exercise caution, keep a few limitations. You need to take the financial decision after considering the following questions.
Was I thinking of buying a car before this pandemic?
If you were not feeling the need to buy a car before the coronavirus pandemic, it is wise to hold off the investment. However, if you were thinking of making the purchase, there is no better time than the present. Dealerships are flooding their used cars and used trucks in Liberty, SC with deals. In order to encourage buyers, they are coming up with offers like payment deferrals, home delivery and test drive, online appraisals and processing, and more. During this pandemic, you stand to earn both in terms of finance and convenience as the interest rates are lower than it has been in the past decade and used car dealerships are bringing their businesses to you.
Can I afford the credit payments in the long run?
Having stated that interest rates are lower, it is wise to consider that you will still have to commit to making monthly payments. Sure, the overall costs will be low and you can defer your payments for a few months, but it is you who will still have to bear the price of your investment and should be able to pay it. For instance, if you currently own a small business, avoid adding another fixed cost to your list. If your job was in the travel sector, do not expect a recovery anytime soon. Consider these long-term implications of the current pandemic and base your used car buying decisions on those.
What was my car-buying budget?
You surely had a budget in mind when you thought about buying a used truck in Easley. Now, the current deals might seem enticing enough to compel you to go over. But do remember that an economic downturn is not the right time to cross your budget. No matter what the offer is on the table, you will want to save every penny that you can. The low credit interests might get you a better car but you must maintain restrictions here and buy below your set budget. Look to fulfill your need of the car and deny your impulsive side to make unnecessary financial decisions. Yes, used cars might become cheaper. But you might have financial constraints as well.
How will the decision impact my future credit-worthiness?
With the above boxes ticked, you will also want to keep an eye on your present and future credit score. You should not be taking a loan that you cannot afford as that will be detrimental for your overall score. Plus, if you are likely to receive a pay cut but can afford the car payments as well, be sure to understand that the combination will adversely impact your future credit-worthiness. When this pandemic blows over, you might have to draw credit to run your business or add an extra truck to your fleet but the poor score will keep your request away. The buy here pay here lots can get you the truck but not any other loan that you might need.
Awaken your analytical side to consider the bigger financial picture. Buy a used car with certain limitations and make use of the dealership deals on offer. As the health and economy of the entire country are struggling, buying a used car can no longer be a split-second decision.