If you’re considering buying a new car then you might just want to wait for a moment. Toyota seems to have a reason why you should be considering buying a used car over a new one. Generally, automakers offer better finance rates on new cars but perhaps for the first time, Toyota is offering lower interest rates for its factory-certified pre-owned cars.
So you can now buy a used Toyota Camry under $20,000 at a finance rate of just 1.99 percent! And not just the Camry, Toyota also has 60-month, low APR deals on the RAV4 and Corolla as well. Moreover, the Japanese automaker is pushing hard on selling certified pre-owned cars and has aggressive APR deals on some of their hybrid models as well. If you’re planning to finance your new car, we would recommend you to consider these offers from Toyota.
The major driving force behind Toyota trying to lure buyers with lower interest rates is the acute shortage of inventory and raw material the auto industry is currently in. After a year of lockdowns, shutdowns, distorted supply chains, and shortages of key components like microchips, not just Toyota but almost all the automakers are having a tough time with keeping up with the sudden spike in demand for new cars.
Microchip shortage has plagued the whole of the auto industry. With large stocks of silicon being diverted for manufacturing COVID-19 vaccine vials, the auto and the electronics industry is hit with a low supply of silicon-based semiconductors and microchips. As a result, many car manufacturers have had their cars sitting idle in their plants without any electronic components on them. Ford had about 20,000 vehicles in their plant, waiting for electronics to fit in and they started getting out after months of waiting in June 2021. Moreover, after a rough year in 2020 and with sales hitting rock bottom, many carmakers had canceled and cut down on orders that they had placed with the suppliers.
With the stimulus coming in from the federal government, many people have extra cash in store. Not just that, people haven’t had a chance to spend on vacations and leisure for the last entire year and hence there are many who are finding avenues to spend the excess money. Cash-rich buyers are lining up at dealerships and even are ready to pay markups and purchase new cars. As a result, the demand for new cars has suddenly shot up and distressed car manufacturers are just not able to cope with it and that has resulted in long waiting periods and marked up prices. To bypass this demand and to get more people to buy used cars, Toyota has come up with this very interesting tactic.
Furthermore, to manage the demand for new cars, Toyota has stopped offering any form of APR deals on new Camry’s in South California. Plus, dealers in California have asked Toyota to stop advertising lease schemes and offers. It doesn’t mean that you cannot get a Toyota on lease but it’s just that dealers and the company aren’t all that interested in leasing out new cars and instead want to divert those cars towards new purchases.
As a result, prices of new and used Toyota’s have become extremely volatile. New car prices have shot up and so have the prices for new cars. Many dealers have been reportedly calling their old buyers to whom they sold cars a year or two ago and asking them whether they would like to sell their car. The new car crunch is for real and that’s why dealers are hunting for new ways to get more used cars on the shelf.
The Camry is a bread and butter car and there’s always been a great demand for it- for new and used both. Like we mentioned earlier, used Camry, Corolla, and the RAV4 are offered with APRs as low as 1.9% while the lowest APR recorded on any new Toyota vehicle was about 2.9% for 60 months. And that’s perhaps happening for the first time in the auto industry that used cars are being offered with lower rates!
On the flip side though, many people with excess cash have sold their existing cars and got in line for a new car. So, now you have many used cars in great condition and low miles on sale. And even if they are priced a little more than the usual, considering the long wait period for a new car, getting a used car does make great sense.
Moreover, if you’re planning to get a car on loan, buying a new car makes little or no sense. With brands like Toyota offering dead cheap interest rates on used cars, it certainly would be a great financial decision to settle down for a relatively new and cheap used car.