Think about the rate before getting a car loan
7 March 2008
It can seem like a safer option when getting a car loan in times of rising interest rates, but a fixed rate car loan is often more expensive in interest payments in the long run.
Unless you took out auto credit before interest rates began to rise, then the auto finance lenders have already factored in future rises into their interest rates. A variable rate will definitely change in the future, but you won't be paying that higher interest now, and you may be able to refinance your car loan for a longer term if you meet troubles paying it off in the future.
A fixed interest rate on your automotive loan merely provides peace of mind at a premium. Does this seem like a good investment in exchange for a more costly car loan?
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