When I was new to the whole house-buying experience, I was amazed the way real estate agents always had the same mantra: Prices going up -- time to buy; prices going down, -- time to buy; interest rates going up -- time to buy; interest rates going down -- time to buy!
To my feeble financial intellect, it couldn't always be the time to buy -- and I was right.
Fast forwarding to the current automotive market, I've been skeptical of strong advice that consumers should stay out of the car-buying market for as long as a year or, to the contrary, they should step up right now because deals aren't going to get any better.
No one knows the absolute answer, even in stable times.
But there are some signs to take into consideration:
- Despite reports that the government money poured into banks and investment companies may not have been used as intended, the credit market is loosening. One manufacturer, for example, is offering its best financing deal to people with credit scores of at least 680. That's considerably lower than the 700 to 740 credit scores attached to some other offers.
- Leasing was believed to be going the way of the carburetor, but that doesn't seem to be the case. Sure, most companies pushing leases are not based in Detroit, but even Ford is touting leases on TV.
- The biggest move on the horizon that could have consumers being offered the best deals of the '08-'09 year is the apparently assured passage of the Detroit auto bailout deal.
It could mean ultra competitive pricing across the market. Here's the lay of the land:
Ford, GM and Chrysler are going to be under tremendous pressure to show their new stakeholder -- the U.S. government -- that they can quickly change their money-losing ways.
True, they can't skip ahead to cutting edge cars like GM's Volt, but they will be pushing hard to find immediate ways to cut costs and create marketing deals that will draw consumers back in. Employee pricing won't impress buyers as much this time around.
Helping out the situation is gasoline under $2 per gallon.
Foreign-based carmakers will be forced to compete to solidify the market gains they have picked up the past few years.
On the downside, tens of thousands of people are losing their jobs, a trend that shows no sign of letting up. Even though more than 90 percent of workers are still employed, confidence isn't high.
But between now and late spring, buyers will see a wide array of offers from manufacturers and bargains from struggling dealers.
Whether it's time for you to strike -- no matter how good the deal -- will depend on some old-fashioned standards: Do you think your job is secure? Do you have cash for a decent down payment? Does it make sense to take on new debt now?
If the answers are yes, then there may be a harmonic storm of good deals on the horizon.
Here are this week's reader questions:
- Good time to buy a car? Yes and no
- How can I get car back from my ex?
- Do I have to give dealer a refund?
- How much do I owe after car's auctioned?