Many media outlets have been talking a lot about the Fed raising interest rates in order to combat inflation. The Fed has raised the base rate by about 3% so far this year. This is a scary proposition when it comes to a big money purchase like a home or a vehicle. It has a drastic effect on the monthly mortgage payment. But the good news is on vehicles that we sell here at Reynolds Automotive the rate hikes will not cause nearly as dramatic a payment increase.
We usually sell vehicles that are around $20,000 retail. I am going to give you an example of a vehicle that a prospective consumer would finance $20,000 with the older lower rates and what the 3% rate increase does to a 60 month payment.
$20,000 financed at 60 mos. for 3.25% the payment is $362
$20,000 financed at 60 mos. for 6.25% the payment is $389
As you can see the raise in the payment is $27 or less than $1 a month. So don't let the rise in rates scare you away from getting the next car of your dreams.