Consumer research and ratings firm J.D. Power has released its January auto sales forecast, and the trends aren’t looking great for the industry. This month’s sales will fall for the second year in a row, with a 2.7% decrease from last year. But lower January sales are usually expected, as the industry makes a lot of December sales trying to get rid of old models. And with dealers offering even bigger savings during Presidents’ Day weekend, especially on older models, potential buyers will certainly be asking: Is now a good time to purchase a car?
At the moment, the market appears to be tilting in favor of the consumer. But there are more questions than just whether or not to buy. Should buyers apply for financing from banks, credit unions or manufacturers? Which manufacturers offer the best financing and leasing terms? How do interest rates compare for new versus used vehicles?
You don’t need a certain credit score to lease a car. The average credit score among new lessees has ranged from 715 to 722 over the past five years, according to Experian. But people with credit scores below 580 have taken out roughly 13% of the auto loans and leases over the past decade, according to data from Equifax. And more than 7% of new leases go to people with credit scores of 300 to 600. Such scores are firmly within “bad credit” territory, which just goes to show that a low score won’t completely prevent you from leasing a new set of wheels.
Although it’s clearly possible to lease a car with pretty much any credit score, the lower your score is, the fewer options you’re likely to have and the more expensive they’ll be. Just consider how those low rates you see advertised on television are “limited to well-qualified lessees.” Whether you opt for a lease or a loan, you’ll also have to get car insurance. And the cost will also depend on your credit standing, with people who have excellent credit capable of saving a great deal.
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