What's Happening?
Consumer Reports has issued guidance for consumers navigating the challenging car buying and leasing market. With new car prices averaging around $50,000 and interest rates near 7%, many families are finding it difficult to manage car payments. The report
emphasizes the importance of preparation and patience, advising potential buyers to secure loan quotes from banks or credit unions before visiting dealerships. This strategy provides a baseline for comparison against dealer offers. Additionally, Consumer Reports warns against long-term auto loans, such as 84- or 96-month terms, due to the significant interest costs over time. For those considering leasing, understanding the fine print, including mileage limits and end-of-lease fees, is crucial. The report also suggests using online tools like TrueCar and Cars.com to compare prices and availability.
Why It's Important?
The guidance from Consumer Reports is significant as it addresses the financial strain many consumers face in the current economic climate. High vehicle prices and interest rates can lead to increased debt burdens, making it essential for consumers to make informed decisions. By highlighting the potential pitfalls of long-term loans and the importance of understanding lease agreements, the report aims to protect consumers from unexpected financial challenges. This advice is particularly relevant as tariffs and other economic factors continue to drive up vehicle costs, impacting affordability for many Americans.
