Car Shoppers Have Little to Fear From Debt Downgrade

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NEW YORK (MainStreet) —  Anyone who was considering buying a new car before the recent round of economic woes shouldn’t let the U.S. debt downgrade stop them.

According to experts at Edmunds.com, car prices are unlikely to spike because of the tumultuous week on Wall Street and creditworthy consumers will still be able to get car loans. Additionally, the interest rates associated with new loans should be spared from effect that may plague some mortgages and other industries.

“The turmoil is unlikely to have a negative effect on car buyers,” Lacey Plache, Edmunds.com's chief economist said in a press release. “All market factors suggest that credit will remain available, that interest rates will remain stable and that incentives may help keep car prices low in the immediate future.”

Plache said auto prices and loan availability will remain stable, thanks in part to timing. Many Japanese automakers have just recently restocked their inventories after the earthquake in March slowed production and will be looking to recoup lost sales.  Additionally, other dealers are trying to unload 2011 models to make room on their lots for next year’s vehicles.

The sales drive will create a competitive marketplace and keep low prices and transaction incentives in play, Plache said.

Additionally, she added loan interest rates will remain stable since “more Treasury bonds will now be required to secure loans, meaning that the demand for the bonds will increase. This in turn, will keep downward pressure on U.S. debt interest.”

According to Edmunds, zero percent financing is still currently available on many Chevrolet, Chrysler, Ford and Nissan models.

Of course, buying a car can be tricky in any economic climate and car shoppers can benefit from some careful research. Check out MainStreet’s tips on how to score the best price on a new car or what to do if you are in the market for a  used one.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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