We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.
Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.
Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.
Some businesses are taking extra steps to maintain sales during the COVID-19 pandemic — including one type of business that often relies on in-person pitches: car dealerships.
With normal showroom operations on pause in many states, car dealerships looking to make sales have resorted to some uncommon tactics, including delivering vehicles to people’s homes for test driving and offering a variety of deals.
But exceptional service and low loan rates might not make a new car a good idea for everyone, especially during such a volatile time for the economy. Before you go through with a purchase, read the fine print and consider your overall finances.
Want to learn more?
- What are car dealers offering during the COVID-19 pandemic?
- What should you consider before buying a car during the pandemic?
- What’s next?
What are car dealers offering during the COVID-19 pandemic?
For car dealerships in many states, business has continued as usual during the coronavirus pandemic. If showrooms have not been ordered to shut, customers are able to visit those that remain open to purchase an automobile (though perhaps not with the usual deal-sealing handshake).
But customers might be wary of those in-person visits — and they’re not an option at all for residents of states restricting sales to online or remote interactions.
As the typical in-person car-shopping experience dwindles, car dealerships in many states are taking extra steps to keep business flowing.
One way car dealerships are getting attention is by offering financing deals. Some dealerships are offering 0% APR on loans for up to 84 months for qualified buyers, while others are offering deferred payments. Certain dealerships are even offering payment protections for buyers who lose work because of the pandemic. The draw of these offers may be especially effective for buyers used to buy-here, pay-here financing and other options with major drawbacks.
More and more dealers are trying to bridge the physical divide brought on by the present situation, too. Home delivery for test drives and options like online finance applications and online trade-in assessments may be signs of a new normal for dealers and buyers alike.
What should you consider before buying a car during the pandemic?
Many dealers’ offers may seem too good to pass up, and you might even appreciate the novelty of an at-home test drive. But purchasing a car is still a major financial decision, so do your due diligence before jumping on what appears to be a fantastic deal.
Before going through with a purchase, ask yourself these important questions.
- Do you really need a new car right now? While some workers, such as delivery drivers, may find themselves driving as much as ever, social distancing has cut down on the commutes and driving opportunities for many Americans. While it might seem like an ideal to time to buy a car from a financial perspective, it’s still a major purchase that might not see much use right away.
- Were you thinking about buying before dealers unleashed these new offers? Keep in mind that dealers may be putting forward enticing offers to nudge you toward a decision that you might not have otherwise made. If you weren’t already considering buying a car, then it might not be a purchase that fits into your life right now.
- How does a car payment fit into your overall financial picture? A regular auto loan payment is a major financial commitment, even if it comes with a 0% APR. Loan defaults were on the rise even before the COVID-19 pandemic, and the risks are even greater if your future finances are up in the air. Consider whether you’re able to pay that amount over the long term, especially given the underlying risks of an 84-month auto loan and the current economic instability.
- What’s the fine print on the deal you’re considering? The highlights of car dealers’ offers might look great, but potential pitfalls could still lurk in the terms and conditions. As always, make sure to read the fine print to get a clear sense of what you’re signing up for. The deal you’re eyeing may not even be available to you.
Dealerships are going to great lengths to make sales, including offering attractive financing arrangements. For some people, these deals will be a great opportunity to buy a car with reasonable terms. For others, it may not be the right time to take on a car payment.
Before committing to a new car purchase, consider your financial situation. If you’re unsure about a particular aspect of a deal after carefully considering the pros and cons of buying, keep in mind that salespeople are likely motivated to help you. Anyone who’s willing to deliver a car to your doorstep for a test drive is probably able to hop on the phone for a few minutes to answer some questions, too.