Auto shoppers have much to be grateful for. Simply put, 1998 has been a great time to buy a car.

“This is the greatest auto market for consumers in decades,” said William Wilson, an economist and vice president at Comerica Bank in Detroit. “They have more selection than ever before and they have more leverage when it comes to price.”

The reason for all this auto-buying bliss: Overproduction on a worldwide level.

And, as if good prices and selection weren’t enough, auto shoppers are also enjoying some rather impressive lending rates.

GREAT RATES

The captive financing companies of major auto manufacturers such as Ford, Chrysler and General Motors are offering 0.9 percent, 1.9 percent and 2.9 percent loan rates on many 1998 models. And Nissan and Mitsubishi are offering no-interest loans to customers with excellent credit. Who qualifies for these super-duper, no-interest deals?

Customers who have had a previous car loan, and who always pay all their bills on time, according to Jim Sharp, a sales representative at West Palm Mitsubishi in West Palm Beach, Fla. A detailed listing of auto manufacturers’ rebates and discount financing can be found on

Edmund’s Web site.

Used-car buyers have much to be grateful for as well. Bankrate.com research reveals the interest rate for used cars is generally less than 2 percent higher than that for new cars. On Nov. 2, the interest rate on a 36-month used car loan was 9.74 percent, only 1.17 percent higher than the 8.57 percent rate on a 48-month new car loan, the survey found. And the popularity of leasing means there are tons of used cars to choose from.

ONLINE LOANS

Auto loan applications are hitting the Internet from banks such as Chase Manhattan and NationsBank and startups like PeopleFirst Finance. Most online applications can be filled out in five minutes and some lenders respond in as little as 15 minutes. Twenty minutes is awfully nice. And there’s no trip to the bank involved when you apply from home. Checks can often be delivered the next day. The rates are good, too, often with 7 percent to 8 percent for new- and used-car loans.

SIMPLE DEALS

Simple interest auto loans with no prepayment penalties are straightforward and easy to understand, and they give people a chance to hack into a loan’s interest by sending in extra payments — free of charge. That’s no small feat, considering prepayment penalties on auto loans can be anywhere from $25 to $200. And that ordinary little loan looks even better when compared with “Rule of 78” auto loans, which are weighted so all of the loan’s interest — and little principal — is paid off in the first year.

Here’s how a simple interest loan works: The amount of each payment that is allocated for interest is determined by the loan’s unpaid principal balance, the loan’s interest rate and the number of days since the last payment. The rest of the payment goes to a loan’s principal. Paying ahead with a simple interest loan will eat into a loan’s principal and cut interest.

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