The rising interest rates and record-high inflation Americans have seen play out this year are the reasons why many new purchases, both big and small, are being put on the back burner. Not only are the prices of everyday goods much higher, the cost of borrowing money to finance something larger such as a new car is a lot more expensive than it was just a year ago.
All this has left many of us with a financial conundrum: Should we continue holding off on making certain purchases right now?
Select went to the experts to see what they’re doing themselves in hopes of giving us some better insight. Here’s a look at the kinds of purchases money experts are holding off on making at this time.
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A new car
Jim Droske, president of credit counseling company Illinois Credit Services, tells us he needs a newer vehicle but is holding off still given the higher interest rates to finance a new auto loan, plus the fact that the current auto market makes it difficult for consumers to land a good deal.
“Even though I would get a higher trade-in value for my car, the math just makes sense to hold off on purchasing a vehicle until the supply and demand economics shift to be more in favor of me, the consumer,” Droske says.
Although Brenton Harrison, a certified financial planner at Henderson Financial Group, says he and his wife have two cars that run smoothly, he admits that since they’re both older models, they were tempted to upgrade one of them when rates were low to “keep up with the Joneses.” He has since had a change of heart in this new financing environment, however.
“I can’t think of an ‘asset’ whose value decreases more rapidly than that of a car,” Harrison says. “And with the manufacturing delays, chip shortages and the natural price increases due to inflation, any itch I had to buy a new car will remain unscratched.”
One money expert we spoke to, however, was indeed able to score a good deal when she decided to buy her car after her lease ended. Kara Stevens, a personal finance blogger at The Frugal Feminista, had extended her car lease to four years, at which point she only had 8,000 miles on it. As a result, she decided to keep it since the buyout offer was calculated prior to inflation. “It was a win,” Stevens says.