The Ins and Outs of Buying a Brand New Car
You see all of those new car commercials on TV and you wonder, how can I afford a new vehicle? You don't have a boat full of money or good credit and today's sophisticated cars are more expensive than ever. With all of the new vehicles with sensors and cameras all over and with crash avoidance systems throughout, buying a new vehicle is a costly proposition.
Fewer and fewer people are holding onto their cars longer than ever, because they're so well built and designed and they know that if they maintain them properly, they can drive them for 10-15 years. At Service King Mt Moriah in Memphis, TN we sometimes see vehicles with 200,000-250,000 miles on them. In fact, a retired teacher in New York has a Volvo that has been driven more than 3 million miles, can you believe it?
With all of the cutting-edge technology on cars in the market today, they cost a lot more. The average monthly payment on a brand new car was $523 in the first quarter of 2018, according to Experian. For vehicles driven 15,000 miles annually, an average car ownership costs came in at $8,469 a year, or about $706 monthly in 2017, according to AAA.
To afford these new vehicles, people are signing up for longer car loans that can keep them in debt for up to eight years, in many cases. People in this country don't mind being in debt, with more and more folks purchasing cars via loans in general.
In 2016, U.S. consumers applied for and received $564.6 billion in car loans, and by the close of 2017, that figure had increased to $568.6 billion. The car loan industry overall has seen steady growth with no signs of slowing down since 2012, but more people are missing their payments: 4.1% of all active accounts were delinquent 90 days or more at the end of 2017.
As car prices continue to climb, more consumers may decide to purchase used vehicles to save money and avoid hefty debt. But, the economy is chugging along, so people are still buying new cars and the end is not in sight. So, if you're in the market for a new car, dealerships are offering attractive sales and incentives to get you in a brand new vehicle with all the bells and whistles.
Service King Mt Moriah, 5475 Fox Plaza Dr, Memphis, TN 38115
Sources: Experian and Consumer Report
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