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Interest rates are low if you're looking to buy a car in Billings

Posted at 11:11 PM, May 25, 2020
and last updated 2020-05-26 16:00:06-04

BILLINGS — Staff at Billings car dealerships have been offering lucrative offers on new cars to move inventory as people start to leave home-isolation and get back on Montana roads.

Interest rates on new-car loans are the lowest they've been in years, according to Nolan Fisher, said general sales manager at Lithia Chrysler Jeep Dodge of Billings Monday. Those with good credit could find themselves with a zero percent interest rate, he said.

“It’s probably been four or five years since rates have been as low as they are right now," Fisher said.

During the pandemic in general, fewer people have been on the road and buying cars. This, combined with Federal Reserve lowering interest rates earlier in the year means people may be able to find a great deal.

“The manufacturers, us or anyone else don’t want to slow down. So what do they have to do? They have to find a way to entice a buyer to come in," Fisher said.

Pre-pandemic, Fisher said customers would pay between 3 - 6 percent interest on an auto loan.

Overall business at Lithia has been okay during the pandemic, but it's safe to say that more people are coming out now to buy, Fisher said.

“There was a period of time where it was a little odd. Fortunately, we’ve had great support from the community," Fisher said. "

Some auto manufacturers have slowed or halted production during the pandemic. Fisher said Lithia has been able to keep a consistent inventory and not overstock the lot.

“Right now, with the plants not producing as many new cars as they have been in the past or nor at all in some cases, pre-owned vehicles have been at a premium. We luckily have had a great selection due to the amount of new cars that we have sold in the past and we’ve taken in a lot of nice trades.”

Hertz Car Sales in Billings operates with a different business model, selling used cars from a fleet of rentals instead of getting them directly from the factory.

Over the month of April, general manager Kieth Mcnally said there's been a rise in customers coming through Hertz's doors.

“We sell 120 cars a month and we’re on pace to do that and more this month. It’s hard to know how many you’ll sell and how many to ask for. But obviously during the start of COVID-19, things slowed down for a few weeks and we didn’t want to take a bunch of extra cars not knowing what would happen. But business has picked right back up," Mcnally said.

While maybe not as lucrative, Mcnally said there's still opportunity for consumers to find a small interest rate on a used-car loan.

“Everybody knows there’s no such thing as zero percent, even though the government gave it for a minute, you’re going to pay for the money. But rates are considerably lower than they have been for a long time, depending on the term. Sometimes in the two to three percent range. So it’s almost like free money," Mcnally said.

Billings residents may have seen news Friday of Hertz corporate laying off thousands of employees and filing for Chapter 11 Bankruptcy. Mcnally said he's been getting calls from people asking if the Billings Hertz will close.

He said Monday that the business expects to be around for a long time, because it is independently owned and wont be swallowed up in the corporate restructuring.

“We are a licensee, so we have the benefits of the company name, but we are individually owned. So we have our own bill system and pay system that’s totally different. Nothing of the debt that Hertz corporate has," Mcnally said.