Over the past two years, the US auto industry has taken a turn for the worse, and global automakers have followed suit. From a possible Chrysler bailout to cutting jobs with Mini Cooper, more consumers are beginning to wonder if a “dying” car loan is worth it. Sure, there are some incredible deals thanks to the faltering industry, but is it worth buying or financing a car whose manufacturer could soon go out of business?
When it comes to getting a dying car loan, the answer is a little more complex than you might think. Yes, those offers can be quite tempting, but try to take your eyes off the incredible value by thinking about your long-term car loan. Let’s say you had an accident with your new car, only to find that the automaker is no more and cannot repair your car for free under the condition of your warranty. This means you have to pay thousands of dollars to repair them or just buy a whole new car, with another car loan still hanging on your head.
The point of this story is that if your car manufacturer goes out of business, you can say goodbye to your warranty. While there are several potential laws out there that are set up to offer refunds to consumers with dead warranties, you will likely have to pay for repairs out of pocket and then wait with all other creditors for your refund to arrive in the mail. .
In other words, you could put your finances at risk by getting a dying car loan!
If you can’t bear the thought of paying for your car repairs out of pocket, then getting financing for a car from a company that is still relatively healthy is a good bet. Of the Detroit Three (which are America’s largest automakers), Ford remains a strong company, with a healthy post-recession outlook. Of course, European cars are still strong and cheap, but quality Japanese automakers are expanding their plants and dealerships around the world.
However, if you’re willing to bet on the possibility of having to pay off two car loans down the road (remember, we’re talking about the hypothetical here!), Then there are plenty of great opportunities, whether you’re looking to buy American or European. . Dealers are desperate to move your inventory, so be sure to shop around for the best possible deals. Also, dealerships and lenders are much more likely to offer you attractive financing rates, so be sure to get the best deal, either directly from the dealership or through a private lender.
Sure, the declining auto industry has changed the rules on how to get a car loan; But if you do smart research, you will have confidence in your car choice, and you will rejoice in your fantastic loan terms!
