Too many variables in predicting interest rates

[hoapres]

MarvBear is often asked to predict interest rates and gives the response that too many variables exist to give an accurate prediction. Here is a list of a few factors and I suspect MarvBear has more :

 

1. Your credit - This one is obvious

 

2. Your downpayment - A larger downpayment not only buys creditworthiness in getting the loan but may also give you a better interest rate.

 

3. F&I competence - Some F&I simply are more competent than others.

 

4. The dealer - some dealers may have more lenders than others.

 

5. The vehicle - If you are dealing with a new car then a particular manufactuer may have special incentive financing for particular units. Used vehicles may be more difficult to secure funding with high mileage and/or too old.

 

6. Income stability - i.e. The amount of money you make and how long you have been on the job.

 

7. The lending environment - Sometimes lenders may be flush with cash for loans keeping rates low and at other times lenders may be somewhat limited with monies making rates higher.

 

8. The customer demeanor - While not likely to be a major factor, an F&I person may work a little bit harder for you when you give honest straightforward answers regarding credit issues particularly after seeing your CR. F&I have seen everything and may be pleasantly surprised when you give honest explanations regarding credit issues. F&I probably won't like the customer that brags about great credit and quickly determines that you have credit issues. This item is not likely to be a factor of significance, but I would much rather have the F&I person willing to do a little bit of extra work than doing the bear minimum in getting me a loan.