Good time to shop for new car, expert says


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SALT LAKE CITY — Memorial Day weekend is the unofficial kick-off for summer. It's also one of the best times of year to go car shopping.

On this Memorial Day, scoping out car dealerships might prove to be a great way to buy a new car, according to Jill Gonzalez of WalletHub.

"The 2016 editions are going to be out mid-July, so they (dealerships) really want to move inventory. Also, interest rates are very low," she said.

WalletHub crunched the numbers on financial offerings at over 150 lenders and found interest rates on new cars are at their lowest levels in three years. Don't expect that to last long, though.

"We know they're going to be hiking up sometime in the near future," Gonzalez said, "probably three to four months from now."

Of course, the cost of a car hinges on more than just interest rates. After all, you still must pay for insurance.

WalletHub looked into data from the nation's top five auto insurance carriers and found premiums on cars in the same price range can differ by as much as 39 percent. Basically, a car's price tag doesn't predict how much you'll pay to insure it.

"The main reason here is the number of accidents in which that car model is involved," Gonzalez explained.

Photo: KSL-TV
Photo: KSL-TV

Take a 2015 Toyota Corolla L and a 2015 Honda Accord LX. The Corolla's sticker price is a little over $5,100 less than the Accord. But the Corolla will cost $232 more to insure every year.

"If a certain model of a car is involved in more accidents, it's going to be higher to insure, more expensive to insure than maybe another car model even though it's higher priced," Gonzalez said.

WalletHub says a new sedan will cost less in insurance than one just three years old. That's about safety improvements.

"There's a lot more safety technology features within cars. Whether it's rear-view cameras (or) sensitivity to whether you're veering off to the side of the road," Gonzalez said.

The least surprising find? Sports cars cost the most to insure. Those premiums run 24 percent higher than the least expensive type of car to insure — the crossover or SUV.

"The survival rate of passengers involved in head-on crashes for SUVs are higher than any other vehicle type," Gonzalez said.

So, before taking a test drive, you might want to check out how much it will take to insure that set of wheels.

Common wisdom says red cars get ticketed more than other. But WalletHub found no association between colors of new cars and insurance rates.

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