Sweet spot saves money on buying a car. When there is a decrease in interest rates and an increase in used car prices it makes the perfect time to buy a new car. Car owners can trade their 1 to a 3-year-old vehicle and buy a new car without extra expenses. In some cases, this sweet spot reduces monthly payments. The buyers can enjoy all the benefits such as advanced safety features and cutting-edge technology.
“Sweet Spot” Resulting Factors
The factor that leads to sweet spot is when the dealers search for the vehicles for certified pre-owned programs. Sometimes when the car inventories become tight and thus increases the car price at auctions and trade in cost for customers.
Sometimes the consumer can buy a new car with lower payments at a particular time. When the popular car model undergoes a redesign, the shoppers get the benefit.
Lower interest rates are the key to sweet spot deals. Most of the buyers don’t realize the interest cost that is spread over five-year tenure. Car loan interest is lost forever, and it is not similar to home mortgage interest.
To attract buyers the finance companies periodically lower down interest rates. The important thing to keep in mind is that the incentives offered are sometimes regional and may not be available in your area. Also, borrowers with top-tier credit get the facility of zero-percent financing.
How to determine that you are in the sweet spot
Many sources offer basic loan payment calculator. With the help of it, you can calculate the loan you still owe. You need to know the current interest rate on your car loan and get the exact value left for your loan payment. Now check the incentives and calculate the loan amount. Compare both, and if later is less than the present interest then you are in a safe spot.