Comparing the car loan interest rates ten years ago with present ones is beneficial since it allows car buyers and loan applicants to gain advantage in negotiating with lenders. It is therefore important for you to understand how these rates works as well as its benefits. Some of the basic facts and advantages of doing the comparison are enumerated in this article to help you negotiate with lenders.
Shifting of interest rates for the past ten years
The present decade was marked by uneven rise and fall of the interest rates for most loans. The fluctuation on the interests was not only confined on auto loans but to almost all type of financing. In the year 2000 which was the beginning of this decade, the interest rate of vehicle purchase was estimated to be around 9 percent. As the years go by, it began to drop to 8 percent in 2007 and finally reached 7.9 percent. As the economy gets more complicated and unpredictable, it is quite rational to purchase a car and obtain financing when the rates are lower.
The realities of dropping rates
The dropping interest rates simply mean that the country is experiencing economic downturn. In the beginning of the decade the interest rate is around 9 percent and as the decade ends it dropped to 6.66 percent. Although there was an increase on the rates in the year 2003 and 2004, it eventually dropped in mid-2005. This means that the rates have fallen down due to rising unemployment and heavy economic losses.
What does this drop means to car buyers
The dropping interest rates for car purchases might be beneficial for car buyers given that they possess a permanent source of income. They can to purchase vehicles through loans with lower rates and are able to pay the loan off before the term ends.