Birmingham One of Best Places in America for Car Loans

BIRMINGHAM, MI – The auto industry closed 2015 with record sales of 17.5 million autos, clearing a peak last reached 15 years ago, due to cheap gasoline, employment gains and low interest rates, and 2016 is off to a good start as well.

WalletHub’s analysts divided the average car-loan debt by residents’ income in each of 2,570 U.S. cities as of September 2015, based on TransUnion data.

Some key findings of the study:

• Interest rates for new cars are close to their lowest point in the past three years. However, the average new-car loan now charges 16 percent less interest than the average used-car loan.
• Now is the time for people with excellent credit to buy used cars. The average interest rate for such buyers has fallen nearly 32 percent since the beginning of 2014.
• Overall, buyers who have fair credit will end up spending about six times more to finance a vehicle than someone with excellent credit, which equates to $6,176 in additional interest payments over the life of a $20K, five-year loan.
• People in the market for a new car should start their search for financing with car manufacturers (rates 33 percent below average) and credit unions (32 percent below average). National banks (2 percent below average), and regional banks (33 percent above average) should be secondary options.
• Car manufacturers continue to lack transparency when it comes to leasing offers, with the average one receiving a WalletHub Transparency Score of 4.5/10. The most transparent manufacturers are currently Mazda, Infiniti, Mini, BMW, Acura, Mercedes, Honda, Volkswagen, Kia, Toyota, Nissan and Hyundai and even they registered only a 6-point rating.
• Dodge, Nissan, Honda and Mini offer the lowest financing rates out of the major car manufacturers we surveyed. Chevrolet, Jaguar, Volvo and Toyota have the best leasing offers, on the other hand.
• If you plan to keep your car for only three years, 86 percent of manufacturers will give you a better deal if you finance instead of lease. Nevertheless, always make sure to do the math in order to ensure you’re maximizing savings.

Here are the cities that get the best bargains on car financing:

1: Scarsdale, NY

2: Bronxville, NY

3: Hoboken, NJ

4: Bloomfield Hills, MI

T-5: Cupertino, CA

T-5: Lexington, MA

T-5: Los Altos, CA

T-5: Winchester, MA

9: Chevy Chase, MD

T-10: McLean, VA

T-10: Saratoga, CA

11: Arlington, MA

T-12: Birmingham, MI

T-12: Foster City, CA

T-12: Mill Valley, CA

T-12: Ridgewood, NJ

T-12: Westfield, NJ

T-18: Marina del Rey, CA

T-18: Needham, MA

T-18: Potomac, MD

T-18: Powell, OH

» Photo via Flickr / Creative Commons