This month, General Motors, Chrysler, Ford, Nissan. and others are offering zero-percent interest rates on auto loans. Luxury makers such as Acura and Cadillac have lease deals with zero-percent down. Banks have cut their interest rates on auto loans in half.
"If you feel comfortable purchasing today, the deals are out there to be had," says Mark Hawks, 40, an information technology specialist from suburban Washington, who shaved thousands of dollars off the sticker price of the Ford Taurus SHO sport sedan he bought in December.
Hawks has a credit score of 780, which puts him in the highest tier of borrowers. He was pre-approved through his credit union for a five-year loan with a 3.99 percent annual interest rate. But his dealer beat that, offering a 3.79-percent rate with no payment for 90 days through Fifth Third Bank. The dealer also kicked in a $2,000 rebate and the trade-in value of Hawks' eight-year-old Subaru. Final price of the new car: $33,000, compared with a sticker price of $46,000.
The lesson? Shop around for favorable loan terms, even if you don't have great credit.
Here are some reasons for the great deals:
Lower rates. Buyers are paying an average annual percentage rate of 3 percent for new cars financed in February, down from nearly 4 percent in the same month a year ago, says auto research site Edmunds.com. That's one of the lowest rates since before the economic downturn, when cheap credit helped fuel the housing bubble and subsequent financial meltdown.
