EchoBay Expert: During some weeks I see the Chrysler dealer in my town advertising great auto loan interest rates in the newspaper and other weeks the rates are higher. Why do these move up and down so much and how can I know when they'll be going lower so I can get my auto loan?
Loyal Reader: It is nearly impossible to predict when dealers will offer low auto loan interest rates. But there are several factors that can affect it. These special financing offers are usually offered on slower moving models.
If the car is less in demand, the dealer will be more likely to offer a special financing rate to move the car off of his lot. If the car is in high demand, it is best to wait until demand lessens or check rates through other avenues such as your bank, credit union or online.
Second, sometimes there are special interest rates offered directly from the manufacturer. This is most common for the current year model when next year's models are arriving on the lot. At this time, the dealer is anxious to make room for newer inventory.
Finally, the fluctuating rates could be due to rate wars between manufacturers or other dealers. If the dealer down the street is offering 0% financing, your dealer may do what he can to match the rate so he can keep the business. As you've seen, the rates can fluctuate often.
Practice a little patience and wait for a low interest rate deal to roll around before you take the plunge to buy a new vehicle.