The economic recession has caused lower interest rates for those who plan to finance a new or used vehicle. Several local car dealers agree the lower rates may make it a good time for students to purchase and finance a vehicle.

The time to buy has “never been better,” said John Zwiacher, general manager of Scoggin-Dickey. He said rates were as low as 2.9 percent on cars at Scoggin-Dickey.

“It’s hard to say if it is a good or bad time to purchase a car,” said Jimmy Stallings, general manager for Gene Messer Ford.

However, he said interest rates are the lowest in a decade and the lowest he has seen during the 15 years he has been a car salesman. It is not as difficult to obtain credit as some people think, Stallings said. Students with little credit can obtain a loan.

He said Ford offers rates as low as 5 percent on new and used cars, which is 1 to 1.5 points lower than last year. Zwiacher said Scoggin Dickey has loyalty bonuses and consumer cash available on several vehicles.

If a student wished to purchase a Chevrolet Silverado pickup for $25,000, he said, the Scoggin Dickey consumer-cash offer may include $2,000 in cash or $2,000 in credit to be applied towards reducing the vehicle’s price.

He said another incentive the company offers is a $5,000 to $7,000 on top of the existing consumer cash if the buyer owns a General Motors vehicle from 1999 or later.

Usually, Zwiacher said, college students opt for the 60-month payment period, although 72-month payment plans are available. When interest rates are low, he said, students who are able to should finance vehicles because rates will most likely never be this low in the near future.

Interest rates are not the only factor contributing to a better time for students to purchase new vehicles.

“It’s one of the best times to buy, and the reason is because the quality of vehicles and fuel efficiency has never been better,” said Annette Sykora, general manager at Smith South Plains. “There are a lot of great incentives to keep prices low.”

If students are financing vehicles, Sykora said, they should compare both credit union and dealership rates. She said the benefit of using a dealership is it offers multiple credit options from several sources, which helps people get a good financing deal.

Check with local dealers and see what is available, Sykora said. Being knowledgeable is the first step to financing a vehicle.

Helen Hein, the manager of the Texas Tech Credit Union, said spring is usually a slower business time for the union, and students may be able to take advantage of the low rates.

Hein said the union offers the lowest interest rates it can, but students should always shop around. “It is important to not only shop around for low prices but low interest rates,” Hein said.

Last month Ford Motor credit had a 4 percent interest rate, she said, which was lower than the rate the union offered. Although rates are low and incentives are high, Gerry Landrum, the general manager at Alderson, said students should be careful when searching for a vehicle.

“Higher incentives means it’s the hardest vehicle to sell,” Landrum said. “Don’t buy a vehicle based on how high the incentive is.”

Jenny Kirk, a junior music performance and music education major, purchased a 2001 Honda Odyssey at the beginning of the year.

“All cars are really cheap right now,” Kirk said. “Dealership prices are usually higher than individual sellers, but at this point they are equal or lower.”

She said she looked on the Internet first, checking Kelly Blue Book prices as well as other Internet sources. Knowing what to look for and knowing the information before shopping was important to her, Kirk said.

“We didn’t go just to look,” she said.

Kirk said her and her father had specific locations in mind as well as printed information about various vehicles they were interested in. According to Edmunds.com, it is important to remember when negotiating with the salesman for the most favorable auto loan that nothing is permanent until you have it in writing.

Our Take

Car sales typically decline during times of economic turmoil. The collapse of the financial sector, combined with the increasingly desperate plight of the American automotive industry, have made it a difficult time to hunt for cars. Prices and interest rates are low (the average prices are significantly lower for both new and used vehicles than last year).

However, interest rates are not the only cost inherent in owning and operating a car. Maintence and operating costs are as high as ever, and it may be difficult for a college student to keep up with these types of payments. The average lifetime for a car is about 5.5 years. Depending on your outlook, you might find it prudent to buy now, while it is relatively cheap, or to wait until the economy is in better shape.