The downgrading of America’s debt has been splashed all over the news for a few weeks now. Immediate predictions of interest rate jumps and credit turmoil have not come to fruition, but is there still a possibility of interest rate hikes in auto lending?
The basic thoughts of the debt downgrade are that the U.S will now have to pay a slightly higher interest rate when it borrows money. Since Congress will never quit spending money faster than it comes in, borrowing money is a given. To cover the additional expenses from higher interest, the Fed will eventually charge more to banks who borrow that money, and it will trickle down to the average guy trying to finance a new or used car.
The increase in interest rates has not occurred…yet. Consumers should expect to see low interest rates on car loans for a few more months. Beyond that, it is hard to predict. Whether you decide to buy a car now in case the rates jump or want to wait is a personal decision. Which ever you do, shop around for the best rate before signing any loan documents.