The price of cars has been rising recently. Due to the report of CNN, the CPI in 2021 has climbed to the highest in the past 13 years, and it was also 5% higher than the year before. Among them, about one-third of the increase was caused by cars.
This year, about 37% of potential consumers expressed their concerns about the rising prices of cars. Sourced by the data of automobile information website Edmunds, the prices of cars in the US have been rising in the past 3 years. In November 2021, the price of the used car reached $26,000 on average, which has increased by 37% compared with the same period the year before.
As for the brand-new cars, the average transaction price has gone up around 15% to $41,000. Compared with the same period the year before, there is a subtle increase, but the rate is not as great as that of used cars. As sourced from the latest data by JPMorgan, car prices in September 2022 have risen 42.5% compared to the same time in 2020.
There are many reasons causing the car price rise, however, they can all boil down to two reasons: strong demands and limited supply. Regarding the strong demands, on the one hand, it is necessary to talk about the impacts of the pandemic.
Due to the potential threats of being infected, plenty of rental car companies were facing stagnant demand and had cut off most of their business while selling most of their fleets.
However, as the impact of the pandemic becomes weaker and the gradual recovery of tourism, the travel demand suddenly increases and car rental companies are suddenly facing a shortage of car resources. This makes the demand for cars go up recently. According to the data of JD Power, U.S. consumers have bought more than 7 million new cars in the first half of this year, which reached the highest point on record.
On the other hand, the reason for limited supplies seems to be easier to understand. The continuing downturn in the economy and the pandemic have both caused a decline in productivity previously, which, mainly because of the continuing global shortage of chips and petroleum (due to the ongoing war and unsteady world situation), stated by Natalie Warb, the financial expert of CouponBirds.
“A deteriorating macro outlook is weighing on consumer sentiment and keeping potential buyers out of the market.” said the lead automotive research analyst Ryan Brinkman from JP Morgan. Fortunately, nowadays, financial organizations like banks and loan companies have made it easier to get loans to pay for a car in installments. However, it is pressuring consumers to another point of view that they are going to be in debt for decades just to buy a car, which discourages people from getting a car somehow.
Then, it comes to many people’s minds – How to make paying for car loans easier? Here are a few points for your reference.
- Check Your Balance And Make Your Plan Depending On It
Always remember to check your balance first. Make sure your balance and every extra payment is enough for your cyclical loans and develop your plans based on it. Be careful of every extra payment, and make sure every one of your payments goes to pay for the loan principles, not the interest or extra fees.
- Shorten The Cycle Of Each Payment
Make your payment cycle shorter. It’s easy to achieve. For example, if you plan to pay $1,000 one month, try to change it to paying $250 a week instead or $500 every two weeks. If your lender allows, just do it. If you pay every two weeks instead of paying monthly, you will end up finishing your loans a lot earlier than expected and it will be an easier transaction if you pay in a shorter cycle. Also, it’s a great way to avoid a penalty for delay.
- Adjust Your Payments And Round Them To The Nearest Hundred
When calculating your bills and plan to pay your loan, try rounding up your payments. It will make small changes in a short amount of time but will make a great impact in the long run. For instance, if you have $590 to pay for one cycle, round it up to the nearest hundred to $600. You will save $10 for one time, but $100 for ten times, and hundreds of dollars will be saved in a year. It can help you get a faster payoff and lessen your interest as well as your pressure.
- Never Skip Any Payments
None of the financial institutions or experts would suggest that. Skipping payments is bad for the consistency of your loan and may do harm to your credit score.
If you are trying to buy a car with loans, you’d better pay for all your other debts so that it will make your financial condition easier. Try these ways to make your loans easier and with less stress, and just get yourself ready for your own car!