I was absolutely amazed when a car salesman told my husband and I about how much the production of new cars had fallen off of a cliff after the infamous 2008 stock market plunge and the ensuing financial chaos that we now know of as our “new normal”.

He said that the production of new cars was cut in half – we are talking millions of cars here – in a one year time span. That means that many less people were needed in the assembly lines, that many people lost jobs, and that much more productivity was lost here in the US because our outlandish, unwarranted lifestyles had gotten so out of hand that it finally came crashing down around us.

He also said that used car inventory was the lowest it has ever been simply because there aren’t enough to keep up with the demand. After all, with the new fiscally aware mentality of America, people are looking for good deals. People are also now driving their cars until they die so they can wait as long as possible in between new car purchases.

A good deal is not classified as something that costs a third more and loses a third of its value as soon as it is driven off the lot – the definition of a new car these days. He also said that it’s hard to keep up with the demand for the used cars, and that is why the inventory is so poor.

So my husband and I knew a great deal when we saw it. My husband’s eyes lit up when he spotted a light silver Jeep Liberty on the lot. It had only a little over 14,000 miles on it and it was priced ten thousand dollars less than the brand new 2011 Jeep Liberties we saw lining the lot.

What a deal. Sure, a Jeep Liberty isn’t the best on gas mileage due to its size and its six cylinder engine. However, we live in the snow belt and both have long drives to work, so gas mileage, while important, was not the end all be all to us.

What sealed the deal was that the dealer told us that they were great in the snow. That was just more important to us at this juncture. After all, we still have one car in the houseold that is excellent on mileage, and that’s my little Honda CRV that gets close to 30 MPG.

The car industry was heavy-hit in the recession that officially became apparent to us here in the US in 2008. Along with the banks, the auto industry as a whole was “bailed out” by the federal government, much to the dismay of some economists.

While many of the car companies that us taxpayers bailed out have turned out to be a good deal, since they paid their debts relatively quickly, they still had a hard time getting back on track due to extremely low new car sales.

New car sales are where the auto industry make the best money. After all, they can’t make as much on the secondary market where the cars are sold as used, that’s where the dealers make the best money.

But now with Honda and Toyota offering “ceritified” used vehicles, they may have honed in on a little of that action and be able to profit from it since it still has their seal of approval and people may be more likely to buy.

This still at least keeps the money in the auto industry as a whole, so it does give some benefit. Used cars have become enormously popular in the past year, since more people are realizing all they need is a simple vehicle.

Used cars are something that I myself have always believed as being a wise choice as opposed to buying new. Other than getting a great warranty with a new car, you really aren’t buying much more because a car is one of the worst investments you can make.

You’ve heard the saying that a car’s value drops 30% as soon as you drive it off the lot. Well, that’s true for the most part. Especially since so many Americans today have longer commutes to work, they put a lot of miles on their cars in a short period of time, thereby quickly reducing the value of the car.

It’s not like a home that is supposed to gain value as it ages. It’s basically something that loses value with age and mileage unless you’ve gotten yourself some limited or collectors edition.

It’s coming up to the time where my husband and I, unwillingly, are going to have to buy another car. His old car is on its last legs, and since we are not the kinds of people who have to have the best and latest in a vehicle, we’ve dragged our feet.

Well, it’s come about time to pay the piper, so we are sort of nosing around for what types of used car deals are out there. There are still some excellent deals, and we are determined to find one that gets him to and from work with the least amount of maintenance possible. Consumer reports is going to be our best friend over the next few months!

My husband and I are of the same mentality when it comes to the vehicles in our household. We run them into the ground. We are definitely not the type of people who need to get a fancy new car every time we get tired of the one we have.

We also are not the kind of people who get rid of anything until it literally cannot run any more, or until it is just unusable. Call it the eternal practicality in me. It’s been bred into my mentality after years of having to go with very little, and years of scrounging when I was so broke that I could barely afford my groceries.

Not that I’m trying to play the violin here. I actually feel very lucky and blessed to have the kind of practicality that I have. If it weren’t for my thriftiness, I may not be able to comfortably retire. I feel like retiring comfortably is just more important to me than having really nice things all the time.

If I were to buy a new car in the next few years, I certainly would save up a hefty down payment on it, so that my monthly payments would be very low.

This way, you also put a lot of money into it at first, so that you are paying a lot less overall in interest over the three to four years of the loan.

There are some excellent deals on financing cars these days. There are often low financing offers for as little as no interest, or one to three percent APR financing. I got mine for about 2% when I bought my beloved Honda SRV five years ago.

I have been a fan of Hondas for a while, I just coule never afford to buy one brand new until I really started making decent money in my early thirties.

That car is still running like a charm too, and will be for quite a few more years. I keep it up on oil changes, and a lot of the other maintenance that makes a car tick a lot longer and also run a lot better in the time you do have it.

If you take care of your car, and put a lot down on it, then it really isn’t that terrible of an investment, as most financial planners will have you believe.

I have a Honda, which I absolutely love.It’s a Honda CRV, the smaller of their two SUV offerings out of the Pilot and the CRV. I don’t absolutely love their newer more sleek model of this car that came out after 2005, when I bought mine brand new, but I love the older, boxier style of mine.

More importantly, I love what I got with the Honda. For paying a relatively steep price for a smaller SUV, what I got was the peace of mind of owning a Honda, one of the most reliable and long-running cars out there. I’ve only had one problem with it, and it was for a recalled part, which the dealership gladly replaced for me.

Other than your standard small fixes and upkeep, this car has been the greatest car I’ve ever owned thus far. Granted, I was broke most of my twenties and could only afford subpar cars, but I’d venture to say Hondas are pretty much the most reliable car that most people have ever had.

Now that I’ve paid the car off, I’m starting to get a lot of offers in the mail from the dealership giving me juicy offers on their newer models. They entice you because they say you can get a newer model for a significantly lower price than what you were paying on your paid off vehicle. It’s very tempting now, I’ll admit, especially since I’ve already set my mind on getting another Honda as my new vehicle when I do purchase.

However, what I like even more than a new car right now is not having a car payment. Not having a car payment for either of us over the past few years has really helped my husband I I weather some rougher times in income lately, since we don’t have to shell out several hundred more in bills on a car payment.

I have to admit, it’s genius marketing though on Honda’s part, because I am extremely tempted every time I get the offer, and it’s especially tempting because I know my car won’t be worth much for trade in if I wait much longer.

But I’m of the firm mindset right now that I’m going to be frugal and run the car into the ground for all I can and wait as long as I can to get hat new car – which WILL be a Honda, no doubt.

My motto with cars has pretty much always been “if it gets me from point A to point B, then I still love my car”. Especially if it’s paid off! And that’s what my current car is, still running and paid off for several months now. I own a 2005 Honda CRV, which is a small SUV type of vehicle that is fuel efficient because it is still a 4 cylinder vehicle and I think it’s even built on a Civic frame, it’s just that it has the body of a small SUV instead. Yes, many people have dubbed the CRV as a “chick car” but hey I could care less what it’s called, as long as it runs and it is paid off.

It’s been wonderful not having a car payment for well over six months now. I accelerated the payments on purpose for the life of the loan, just so that I could have it paid off before it hit 100 thousand miles, since I have a pretty long commute to work every day, and we tend to use my vehicle to go on long trips since mine is the more dependable vehicle between me and my husband.

But we don’t mind. We’re not people who have to have the latest fancy cars, we’re pretty practical, and if you read any of the “get rich” books, then you know that the people who accumulate true wealth are the ones that do things like keep cars that are paid off for several years instead of trading up to the latest and greatest models whenever they get tired of their car or it goes out of fashion.

If you read books or study how truly wealthy people behave, they really don’t blow their money on things like new cars and vacations all the time, but rather, they save as much of their money as they can, and they live off a small percentage of their income, stashing away the rest in investments and savings that yield returns. A lot of people are learning that with this recession, wealth is very easily lost, and they are paying dearly for lifestyles that have been largely funded by accumulating debt and easy credit rather than accumulating wealth.

In other words, they were paying everyone else before they paid themselves, as the author of Rich Dad Poor Dad says, or something like that. It’s truly sage advice, and keeping your car til it doesn’t run any more is one of the best pieces of advice I’ve ever taken.

Although some are saying that the closing of around 800 car dealerships in the wake of the impending GM bankruptcy is what the company has needed now for years after being oversaturated in the dealerships, of course this is not good news for the economy, since more jobs will be lost of course through these voluminous closings. I just read an article that made a good point about the future of autoworkers now.

They said that it used to be that once you signed on to become an autoworker on the production lines, that you were pretty much automatically guaranteed to be what we call part of the working middle class. Which is a great thing ,it’s certainly better and more desirable than being in the poor, lower class who struggles from paycheck to paycheck and often earns meager wages for hard work. Being an autoworker used to mean you had a great paying job, good benefits, and a pretty much guaranteed future of comfortable retirement.

Well, not any more. As so many other paradigms have changed through the course of this recession, so has the one about autoworkers being comfortable and well paid, and secure above all. Now, being an autoworker strikes fear into people’s hearts as the auto industry faces it’s largest crisis ever and is forced to close down multiple plants and dealerships, putting thousands out of work, and reducing benefits and pay for those that are left holding the bag. Not a great deal, as you’re well aware.

It looks like Ford and GM, although they said they wouldn’t, may be offering special financial incentives to purchase a vehicle from them, after Daimler Chrysler announced their special pricing incentives on cars to move inventory.

Apparently, earlier in the week, GM or General Motors, announced 0% financing for up to six years on most of its cars and trucks. And that’s not all, I guess that another popular domestic car manufactere Ford already had 0% financing for up to 5 years on most of its models of trucks and cars.

The offers aren’t going to last forever though. GM’s offer is to expire first, which will be on this Wednesday after the Fourth of July holiday. And then Ford’s special financing offer is to run through July 31, just like Chrysler’s special employee vehicle pricing incentive does.

So why are all these domestic auto makers putting special incentives on the minds of consumers?

There is an industry fact in sales that is looming over their heads, where financial analysts are predicting new car sales will drop 8% from 12% in June. Bad for them, good for us!

In effort to ousell and outperform rivals Ford and GM, both domestic car manufacturers, Chrysler is said to be offering special discounts and incentives to car buyers soon. So, if you’re in the market for a car now, check out Chrysler cars (although I’m a Honda girl myself).

Set for July, Daimler Chrysler is planning to roll out a new set of discounted car prices to attract new customers, and also to roll out a new employee discount program that will be offered to any employee purchasing a Chrysler vehicle.

The exact discounts have not been disclosed yet, but they may take the form of a car rebate, where you get money back AFTER purchasing the car, and you usually get varying rebates back depending on the model vehicle you choose.

This could potentially save a car shopping customer hundreds or thousands of dollars depending on the deals offered, and will definitely cause a price war once the competitors get a load of the new offers. What good for the consumer is good for the economy, right?

With the demand for more fuel efficient and compact cars with the steadily increasing gas prices, two of the biggest foreign car manufacturers, and American favorites, Toyota and Honda, have experienced tremendous sales jumps in the month of May.

Perhaps it is because the summer time tends to be so heavily traveled as well, but Toyota and Honda are both enjoying a nice boost in new car sales, with Honda beating out Toyota by about 4 percentage points in sales increase, a 21% compared to Toyota’s 17% increase.

This is welcome news for the foreign vehicle companies, especially since domestic car makers such as Daimler Chrysler and Ford are suffering due to a reliance on larger, less fuel efficient vehicles as their staple offering.

The steadily rising fuel prices (with no immediate relief in sight unfortunately), hurt many of these domestic manufacturers, with General Motors reporting its sales were down 12% for the month, while Ford Motor said its sales were down 2% and DaimlerChrysler AG’s Chrysler Group said sales were down nearly 11 percent.

The other leg up that Toyota and Honda may have is the fact that they produce the most notable of hybrid cars right now, which are rising in popularity after fuel prices showed signs of instability. Hmm, maybe the good news out of this for us consumers will be some good, cheap deals on domestic cars, although the overall impact to the American economy most likely will not have a good outcome.

Forecasts for the Prime Rate – which is the best going rate you can possibly get in a given time period, are usually given by financial forecasters and banks about once a month. Yep, the Prime Rate changes that often.

It just goes to show the true volatility and dynamics of the financial and lending industry. Below you will see the most recent forecasts – which means they are estimates.

Why Knowing the Prime Rate is Important

Knowing what you’re getting into, and what the rate is that you would be getting a great deal at is important because it allows you to go into the lending game as a knowledgable consumer who knows a good deal when they see one. Basically, it helps prevent you from getting a raw deal on your loan.

Prime Loan Interest Rate Forecast for the Next Few Months in 2006

May 2006 – 8.0
July 2006 – 8.0
August 2006 – 8.25
September 2006 – 8.50
October 2006 – 8.50