LEXINGTON, Ky. (LEX 18) — While some realtors have seen clients grow a little reluctant to make a home purchase since the Federal Reserve raised the interest rate, the auto sales industry isn’t experiencing the same issue.
Before the rate hike earlier this month, Paul Miller Ford in Lexington was selling an average of 10-15 new and used cars daily, and that number has held fairly firm in recent days and weeks.
“We have such (strong) buying power because we facilitate these loans on a daily basis, several of them every day, so a lot of times we operate with fairly decent interest rates,” said Mark Collier, the General Manager at Paul Miller Ford.
On the other side of New Circle Road, GM, Blake Carlson from Lexus of Lexington was saying much of the same.
“We have a tremendous amount of support from Lexus of Lexington,” Carlson said, before noting that his dealership can still generate auto loans with interest rates that are lower than the rate we’re now hovering around since the rate increase went into effect earlier this month.
Both Collier and Carlson believe this is actually a good time to buy a new car if you’re in the market for one because what you’re driving now might be worth much more than you’d imagine.
“Because of the low inventory of new cars, it drives up the price on of their current vehicle, so the buyer now is able to get more for their trade than they’ve ever gotten before,” Carlson said.
That difference could work to eliminate any increase in the payment that might be created by a slightly higher interest rate.
“That extra little bit in your trade, or a lot extra at this point, will offset whatever interest rate hike you might see,” Collier added.
Both general managers also agree that the federal reserve may not be done with us just yet and could tack on a ¼ of a point or more at some time down the road. Not to mention the value of your current vehicle could drop a bit.
“It’s a tough time to buy a lot of things right now, without question. I don’t know if a car would fall into that category,” Carlson said.
Collier said that waiting if you are in need of a new vehicle, could be a regrettable choice just a few months from now.