Debt Reduction Advice | Debt Reduction Advice

Today’s auto loans are like taking the bus: there’s always one coming, but is it going to get you where you want to go? President Obama painted the picture of an economy that is growing for the first time in a year. And while the third quarter of 2009 did reflect a 3.5% increase in our economic situation, unemployment is at an all-time high as it pushes close to the 10% mark. Driving around the towns and cities of America you see this contradiction in our economic growth and unemployment statistics. Commercial space lays empty, retailers are posting close-out sales, and lenders post foreclosure notices on homes. But you also see auto dealers advertising all time lows in the cost of fuel-efficient vehicles, used car financing promised to all, and automobile dealers flush with government-backed credit and programs designed to help the consumer get low-interest auto loans.

There is no doubt that the status of our auto industry is a strong indicator of the economic health of our country. Indeed Ford Motors just this week posted a surprising and healthy profit. So with this economic optimism in the news and car dealers advertising deals by the dozens, it seems perhaps the right time to seek out the best auto loans and indulge in the giddy optimism inherent in purchasing a new car.

New car dealers and used car dealers both offer auto financing and sometimes with minimal documentation required. Banks and credit unions also are competing in the auto loan sector with lower interest rates. Online companies are also offering vehicle financing with promises of “no money down” loans or “bad credit okay” loans. Loan calculators are also offered so consumers can figure out just how much car they can afford and what their monthly payments will be.

It’s easy to get caught up in the rush of excitement and the promise of a better economy, but it is also wise to be cautious about your financing of a new or used vehicle. It is best to look at what you think you can afford in your current financial and employment situation, and then cut that down by a third. Auto loans are often a mainstay on our credit reports and getting in over your head now, can cause a lot of credit misery in the future. Reading news reports of the growing economy and new strengths in the automobile sector is exciting. But it is best to exercise prudence and caution when purchasing your new or used vehicle, or riding the bus will end up as more than just a metaphor.