Purchasing Interest Rates

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Everyday we make all types of purchases. Usually these purchases are small enough that we don't have to give too much thought to them. In other instances there are purchases that require a great amount of thought. One such instance is the purchase of a new car. The purchase of a new car requires a great deal of consideration and budgeting. When investing in a car there are economic indicators to take into account too. Two economic indicators that can be taken into account are unemployment and interest rates. These indicators can be useful in deciding between the purchase of a new or used car or if it's even the right time to make the purchase. The automotive industry is considered a cyclical industry. A cyclical industry is…show more content…
When people are unemployed they do not think of making a big purchase like this one. Unemployed people can't afford a new car. Those people that do have a job and are at risk of being unemployed can't make big purchases when they are worried about other things deemed more important. As an example, the unemployment rate was between 8 and 10% in 2009 but in March 2015 it was 5.5%. The difference in car sales in those years was huge. In 2009 the sales were 9 million, wherein 2015 they were 16 million. Another factor that affects the financing of a car are interest rates. Interest rates can make a difference when deciding on making a car purchase. A lower interest rate can make buying a car cheaper. Although in a less ideal economic situation it won't make much of a difference in making the purchase. A higher interest rate might deter the purchase from happening in any situation so it definitely is an important…show more content…
Then in January there is a tendency to see the prices to fall while February sees another rise. In general there is a continued expectancy to see prices fall through 2018. The popularity of some automotive classes such as SUVs and trucks, which are increasing in popularity, is driving up the prices. Overall the prices of smaller more fuel efficient cars are lower than those of used cars (Larry Dominique, ALG). In order to get the best prices and the most for their trade in, car buyers should be able to understand supply and demand and how it affects pricing. Macroeconomics is the study of economics as a whole and it affects everyone. It affects us all in the way it helps us make decisions. Issues like inflation, which can reduce the value of our savings or unemployment affect us everyday. As consumer we want to know the cost of good or how much borrowing money might cost. Businesses want to know if it's the right environment to introduce a product at a certain price. Even the government turns to macroeconomics to figure out such things as creating
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