HORRY COUNTY, SC (WMBF) - Car sales have reached an all-time high across the country, and the trend continues in the Myrtle Beach area. Through October, year to date, new car sales are up 5.4 percent, according to the National Automobile Dealers Association. In 2015, car sales are expected to reach the best levels in the past 10 years.
But just because everyone's doing it, does it really mean this is the best time to buy? Right now, there are two main things that are on your side when it comes to why this is a good time to buy. One, the demand is high in an improving economy. Two, interest rates are at almost record lows. And that's across the board, it doesn't matter what brand you're looking at buying. According to Wallet Hub's 2014 Auto Financing Report, you will pay 20 percent less interest on a new car than a used one right now. In other words, if you've ever dreamed of buying a new car, you'd be snagging a better deal now if you bought new.
One reason buying used might actually be more expensive is because the demand for used cars has been driving up the cost. "As people are looking for cars, looking for replacements, they're thinking that they're going to buy used and save money," says Radcliff Lowery, a CPA and financial advisor with Carolina Wealth Advisors Inc. "And in most cases that's pushed prices of used cars up to where it makes sense to buy new," says Lowery.
Manufacturers are coming up with good deals, incentives and interest rates to help you afford buying new. Experts are reminding you that it's not a good idea to stretch your budget for a spur-of-the-moment car choice. It's easy to get caught up in the thrill of tossing the keys for your old, beat up car and driving off the lot with a brand new one. But before you even step foot on a car lot, you need to think some things through first.
No matter the brand, or whether it's new or used, you need to figure out if you're going to buy or lease. And you need to think about the interest rate. There is no universal rule for when you should lease versus buy. But here are some tips to help you in the process. If you plan to drive the car for two or three years or more, it typically makes more sense to buy. But if you plan on getting a new car every year or two, it will make more financial sense to just lease. Make sure when you lease that you don't break the agreement when it comes to miles and maintenance, or you could wrack up fees which can blow your budget.
Keep this in mind, according to Wallet Hub, 90 percent of manufacturers will offer a better deal if you buy instead of lease. So once you decide if you're buying or leasing, then you need to think about the incentives and interest rates. "Depending on what car you're buying, some of them have zero percent, some of them don't," Lowery says. "So you got to know that before you go out and start shopping. And sometimes interest rates, once you look at how much you're going to pay over the life of the loan, it can be $3,000 to $4,000 additional on the car," says Lowery. And it could be as simple as the same car, but just a different level or series-- like standard versus luxury -- will affect a different interest rate.
And be sure to check you check your credit score before you even step on to the lot. That way the dealers aren't having to check it when you get there. And if you already know you're score, you can use that in negotiations when they offer you rates. Also, plan your budget first. And it should include how much you can afford to pay in maintenance each month.
Keep in mind, you do not have to finance it at the dealership. But credit unions and banks tend to have higher interest rates because their only profit is based on the loan and not the cost of the car, like it is for manufacturers.