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KC car dealership explains how increased interest rates affect car industry

Car dealer in Lee's Summit
Posted at 7:22 PM, May 08, 2023
and last updated 2023-05-08 20:22:55-04

LEE'S SUMMIT, Mo. — The Federal Reserve raised interest rates for the 10th time since March 22 on Wednesday.

This increase to a range of 5% to 5.25% affects many aspects of the economy, including how Kansas Citians will purchase cars.

Nevertheless, 18-year-old Will Whitney purchased a car Monday from Bob Sight Ford in Lee’s Summit. He says the process was easy.

“It means I'm doing something right, it means I worked hard and I got something to show for it,” Whitney said. “Need something better, newer [and] more reliable — something with AC.”

Whitney was all smiles looking at his new wheels, thankful for the help he received from his family while feeling proud of his contribution.

“I was just looking for a sedan, something with four doors,” Whitney said. “Something that I can fit my friends in, and this is what we found for a good price."

Even with interest rates increasing, Whitney says he followed one main piece of advice.

“Don’t rush it — make sure you got the good down payment,” Whitney said.

Chris Zieber, finance manager at Bob Sight Ford in Lee’s Summit, drives home the same point to his other customers. He says car payments fluctuate with increasing interest rates.

“So it tells people to just be a little bit more patient now. It used to be you run out, you find the car, you buy it right away — that's great,” Zieber said. "You don’t want to lose that car because it’s hard to find, but keep in mind that you want to make a good decision.”

He advises the importance of checking the math and looking closely at new car tags compared to used lots.

“Folks that look at pre-owned vehicles may actually start looking at new just because with interest rates being higher on used and lower on new, payment starts being a little more feasible on something brand new," Zieber said.

As interest rates have the potential to continue increasing, Zieber says those in the market for a vehicle should prioritize what is best for their wallets and families.

“Just go to someone that you know, someone you trust,” Zieber said.