If you are in the market for auto loan refinancing then here’s some potential good news: used car prices are predicted to fall during the remainder of 2014. This is due to increasing new car sales which puts the pressure on used car dealers to drop prices. Let’s see how all this might affect auto refinancing.
Cash For Clunkers Effect
Over the last four years the federal government’s “Cash For Clunkers” program removed approximately 700,000 vehicles from the market. The estimate is that the overall effect of that program will be a 5.2% drop in the average used car price during 2014. Also, new car sale strength appears to have a strong tailwind.
The US economy appears to be rebounding comfortably. This has increased credit availability which boosts consumer buying power. It is predicted that 16.3 million new cars will be sold by the end of 2014 making it the best year for new car sales since 2006. Part of this boom is also due to incentives which currently average $2,700 per vehicle. Even expensive cars have been selling well pushing the new car average sale price up to $31,262. Finally, many cars are due to come off a three year lease cycle, and this will further dilute the used car market.
How This Could Affect Refinancing?
With all this activity surrounding auto sales there will be a lot of car loans being processed. The increased demand could drive prices lower. Also, if we look to the housing sector, mortgage rates might be dropping soon. Plenty of activity and cheaper credit all point towards a good chance that car refinance rates could see a drop as well.
Your Current Car Loan Might Be Expensive By Year’s End
Given these trends, it pays to look into refinancing your current car loan. The reality is that no one can predict with 100% certainty the country’s financial direction. However, the environment currently looks ripe for auto loan refinancing for the rest of 2014.
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Give CARCHEX a call toll free at 1-877-CARCHEX (1-877-227-2439) and ask about how we can find you the best auto refinance rates available today.
30-Year Mortgage Rates Drop Again, Now 4.12%; Homeowners “In The Money”, The Mortgage Reports
U.S. used-car prices to drop as supply recovers, Cincinnati.com