Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Bob Frick, Senior Editor of Kiplinger's Personal Finance Magazine, to talk about auto loans. Bob, we know there's a credit crisis in the country; home owners are facing it, Wall Street bankers are facing it, what about people buying cars? Is there difficulty borrowing money to buy cars these days?
Bob Frick: Well, if you have a bad credit, absolutely. It's worse than it was a year ago.
Kevin McCormally: Well, what about if you got good credit?
Bob Frick: If you had good credit, it's fine. As a matter of fact, I don't think a lot of realize that because of the Fed's lowered rates and they pump so much money into the financial system. If you have good credit, you get a great loan.
Kevin McCormally: Can you give me an example?
Bob Frick: Sure. Some car makers are offering 0% financing on basically the big gas guzzlers and on Sedans, you can even get 2% or 3% financing.
Kevin McCormally: What if you go for a car that doesn't have incentives?
Bob Frick: Well, the average loan for a new car is just 6.8%.
Kevin McCormally: Well, what about a used car?
Bob Frick: It's actually the same. Now, if you shop harder, you can do even better than that.
Kevin McCormally: Okay Bob, how do you shop for a car loan these days?
Bob Frick: Well first, I would check online banks and then I will probably go to your Credit Union. If you look around and do some comparisons, you can get down to about 5%.
Kevin McCormally: Thank you very much.
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