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Kansas City-area car market not immune to impacts of interest rate hike

Posted at 9:27 PM, Nov 02, 2022
and last updated 2022-11-02 23:17:10-04

MERRIAM, Kan. — The car market in the Kansas City area is not immune to the latest federal rate hike.

On Wednesday, the Federal Reserve hiked interest rates by 0.75%.

Still, local car dealerships and shops know the importance of vehicles.

“A car is definitely an essential,” said James Byrd, with Personalized Auto. “We noticed rate increases between .5 to 1%”

Along "car mile" on Merriam Drive, many are trying to turn deals into wheels.

Byrd says rates were just at 4.9%, but are now about 5.5%. He talked about the process of car shopping if it involves a loan.

“Higher rates do affect car buying, it makes payments higher,” Byrd said. “The best way the customers can get around higher payments and higher rates, is being prepared — check their credit before they come in.”

Byrd also says to shop around for them at your local bank and dealerships.

“Rates don’t really stop people from buying, they are what they are,” he said.

Byrd says as an example, this could affect the buyer depending on the money down.

But for about a $15,000 used car, Byrd says payments are increasing about $15 to $20 a month.

“Try to work a good deal for yourself and ask for those discounts, they are out there,” Byrd said.

He says evaluations of cars have gone down a little bit, but it’s not quite reflective at the dealership.

“We’re not going to go up, we’re not going to go down — but we do offer a lot of value for our price,” Byrd said.

Still, local dealerships say it's not stopping shoppers from purchasing vehicle.

“We have been extremely busy, and we will continue to be because this car market is really crazy,” said Alan Heriford, with Johnson County Automotive.

Heriford says people are willing to pay for fixes.

“I talked to a gentleman today who had to decide on an $8,000 repair to his car, and said I’m not going to buy a used car right now, so let’s make that repair,” Heriford said.

Byrd weighed in on when people could expect the market to improve.

“I really don’t see much changing,” Byrd said. "I do see car prices coming down a little bit, I do see rates growing up a little bit. I think this will normalize next quarter between March to April.”