Summary
- Interest rates on loans are rising sharply, as are insurance rates
- Inflation is causing this rise, as the economy is still recovering from the latest major hit, the Global Pandemic
- Gas prices, interest rates, insurance rates, and more are all combining to cause an aggregate effect of sales slowing down and dropping
- This effect is felt mostly in urban areas, but only two markets are fighting to keep up with projected growth: Compact cars and SUVs
- We think that the only way these rates will come down is with the Federal Government and Automotive Industry cooperating to lower overall spending, increase subsidization of supply, and possible implement a temporary tax to recover the economy.
There are a lot of considerations that go into a new or used vehicle purchase. You need to budget for the monthly payments as well as your insurance, factor in gas, maintenance, have a little set aside for emergency roadside service if you need it, and the like.
Now, to just add to the headache, even as car prices are finally starting to drop again, loan rates are skyrocketing. What is causing this increase, and how is it affecting the automotive new and used market?
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