Make the Most of Lower Used Car Prices

The past few years have been a little rough for used car buyers. Higher prices and low inventory
have made it tough to find affordable used cars. We could even go so far as to say that the
market has been discouraging. Now, there’s a good news, bad news scenario going on. Used car
prices are falling, but interest rates are rising. So, what does a car buyer do?

The Used Car Market Finally Resembles a Normal Market

It’s been a few years since we were in the thick of the pandemic and saw some of the highest
used car prices. Most of the effects of the supply chain issues have faded, so we are now in a
place where the used car market is back down to a new type of normal. Prices are still higher
than before the pandemic, but they are down from their highs in 2021.

Falling Prices are the Good News, So What’s the Bad News?

If you’ve been looking for a used car, you’ve probably seen the prices come down, but with
interest rates steadily rising, the bad news comes when you need financing. In its attempt to
slow the economy, the Federal Reserve has raised federal interest rates, which has made the
interest rates on car loans creep up to levels we haven’t seen since 2007.
Now we have a situation where the market is more encouraging, but buying used cars is not
any more affordable if you need a loan to do it.

Is it Still Possible to Get a Good Deal on a Used Car?

The good news is that it is possible to get good deals on used cars. You might have to take some
extra time to find the deals, but if you do some research and find the lowest prices, you can still
save, even with the higher interest rates.
To get the best deal, make sure you do some research before you start shopping and have a
plan. Used car loans are available at banks and credit unions, but you can sometimes get the
best rates right through the dealership financing department. They often have relationships
with several different lenders, and they will do the legwork needed to help you get the best
rate.

It Can’t Hurt to Get Pre-Approved

One of the best strategies for getting the best possible rate is to get pre-approved before you
start shopping. Not only does this give you an idea of what you have to spend on used cars, but
it also lets you know if you have any credit issues you want to clear up before you sign on the
dotted line. Anything you can do to improve your credit score will help lower your rate.

The Bottom Line

The bottom line is that used cars are less expensive, but rates are higher. Negotiating the price
of the car is your best bet to lowering your monthly payment but keep an eye on interest rates
Refinancing may be an option in the near future.