TIME

Why You Won’t Be Splurging This April

We're getting responsible about that "free money" from Uncle Sam

About 80% of Americans who filed taxes got back a refund last year, averaging just under $2,800. Usually, even though it’s our money to begin with, we treat it kind of like a windfall, buying appliances, going on vacation or spending it in other fun ways.

That’s not happening this year.

According to an annual National Retail Federation survey, nearly half of Americans who plan to get a refund say they’re going to be socking part of all of it away into savings — the highest percentage ever recorded. About 40% say they’re going to pay down debt with part of all of their refund, a three-year high. Perhaps surprisingly, it’s young adults leading the charge, with 55% of those under 24 years old planning to save their refund money, the highest percentage of any age bracket.

About 13% of respondents do say they’ll use the money on a vacation, which is a high not seen since 2007’s tax season, before the recession hit. Only about 10% say they’re making a big purchase like a TV or a fridge, a slightly smaller number than last year and the lowest percentage in the survey’s history. About the same number say they’ll splurge on things like dinners out, spa treatments and new clothes.

“Americans are thinking of the future, and remaining financially secure is a big part of that,” NRF president and CEO Matthew Shay said in a release. Getting our hands on those refund checks is another part — when the survey was conducted in early February, almost a quarter of people said they’d already filed their taxes (although 15% are procrastinators who admit they’ll wait until April).

The good news, relatively speaking, is that fewer Americans are relying on their tax refunds to pay for everyday expenses. It’s still about a quarter of survey respondents, but that’s better than the 30% who said they needed that money for everyday expenses just two years ago.

Even with this year’s intention to be diligent about our tax refunds, though, Americans aren’t nearly out of the woods when it comes to the security of their savings accounts. A Bankrate.com survey published this week finds that nearly one in four Americans have more credit card debt than they do money in savings, while another 13% have no credit card debt, but no savings, either. Fewer than 60% have more savings than credit card debt, a situation Bankrate chief financial analyst Greg McBride describes in a release as “teetering on the edge of financial disaster.”

TIME

The 1 Thing That Could Instantly Make Your Credit Score Better

overhead view of hand holding credit card and using laptop
John Lamb—Getty Images

You can do better than this

Just about everybody has to pay their electric bill, but that payment you make every month to keep the lights on rarely, if ever, makes it into your credit report. And that’s too bad, because one of the big three credit bureaus says it could really shed some “light” on your score if it was included.

Credit bureau Experian conducted a study and finds that the number of Americans with subprime credit scores below 600 would fall by nearly 50% if on-time utility payments were part of their credit profiles. The number of people in the nonprime or “fair” credit bracket of 601 to 660 would shoot up by 54% and the number of people with scores above that would go up by 15%.

There has been a lot of interest in this so-called alternative credit reporting, using data like electric bills, rental payments and even cell phone bills. Advocates of including this kind of information, like Experian, say it would help “credit invisible” people who have little or no traditional credit history establish one. If both rent and utilities were part of credit scores, Experian says as many as 54 million people who are essentially invisible today would be able to participate in mainstream finance.

Right now, a pile of red tape keeps this information from appearing on most people’s credit reports. There’s debate about whether or not the government should regulate inclusion of this kind of data, and advocacy groups have expressed concern that utility payment information could be misused once in the hands of credit organizations and could lead to people’s scores falling if late or missed payments are included. Currently, most of the times a utility bill does make it into a person’s credit file is because they didn’t pay and the bill went into collections. “Reporting such negative data will most certainly push those same families struggling to recover from foreclosure and bankruptcy out of their rental homes,” one warns.

But Experian says if utility payments were included in credit scores, more than three-quarters of people who already had a credit score would see their score rise. The majority of scores would go up by at least 11 points, the bureau says — that’s a big enough spread that could mean the difference between getting the best rate on something like a mortgage or car loan and having to dig deeper into your pockets every month. Experian found that only 3% of people would see their credit scores fall.

 

TIME

5 Secrets Stores Don’t Want You to Know About Their ‘Deals’

Customers shop at the J.C. Penney Co. store inside the Glendale Galleria shopping center in Glendale, California.
Patrick T. Fallon—Bloomberg via Getty Images Customers shop at the J.C. Penney Co. store inside the Glendale Galleria shopping center in Glendale, California.

Want to know the real reasons they can offer such great prices?

Who doesn’t love a bargain? The highlight of a shopping trip can be scooping up something with a slashed-through price or a big “sale” sticker on the shelf.

But stores have gotten increasingly sophisticated about shoring up their profit margins in a climate where people just aren’t spending the way they used to, so those discounts and deals aren’t always what they seem. Here’s how five big chains make you think you’re getting a steal.

JC Penney: Department stores have learned that, to push customers’ buttons, they have to offer whopping discounts. But what some of them do to make the math work is to actually raise prices before a sale, so markdowns are pretty similar to the original, non-sale prices. When JC Penney backed off its failed “no discounts” approach in 2013, CEO Mike Ullman told investors that being competitive “means initially marking up our goods to sufficient levels to protect our margins when the discount or sale is applied.”

To be fair, JC Penney isn’t the only discount store that practices this sleight-of-hand. A CBS affiliate in California investigated Kohl’s with hidden cameras and found that some prices were marked up by as much as $100. “One twin sheet set was listed at 50 percent off the original price of $89.99. But inside the plastic zipper, the earlier price tag shows $49.99, indicating the current sale is only $5 savings from the original tag,” the report says.

Outlet stores: While people have the perception of outlet stores as a great place to snag a deal on a designer coat with a crooked seam or last season’s hot fashions, the truth is that today, outlet stores pretty much operate as their own separate brands. The vast majority of stuff in those stores never so much as touched a rack at the name-brand version of the store. An anonymous outlet buyer tells LearnVest that as much as 90% of outlet merchandise was never made to be sold at a non-outlet store. Not only can this lead to lower quality in outlet-only merchandise, but it also means the so-called full price basically is a made-up number.

T.J. Maxx/Marshall’s: A recent Fortune magazine investigation looked at how parent company TJX Companies’ highly secretive business practices make customers at these sister brands feel like they’re on a “treasure hunt” while raking in the profits. Like outlet stores, these brands profit by having name-brand clothes made especially for them. Those Ralph Lauren sweaters? Odds are they never saw the inside of a Ralph Lauren or department store. (The article mentions Ralph Lauren specifically, but they’re not the only one.) The stores also stock trendy items designed to sell out quickly and often don’t carry very many of the really high-end items shoppers seek out, creating a sense of urgency for customers to snap up something they like before it’s gone.

Wal-Mart: Wal-Mart’s reputation is for the lowest prices anywhere, but customers who don’t shop around could actually find themselves paying more for their everyday purchases. Since discount retailers constantly tweak their prices, a customer who shops on auto-pilot rather than comparison-shopping could find themselves paying more for an item that used to be the better deal. Case in point: A 2012 Bloomberg Industries study found that rival Target edged out the self-proclaimed low-price leader. “Prices at Target were 0.46 percentage point cheaper than Wal-Mart this month. That means for every $100, Target was 46 cents less expensive,” the report says. Of course, this particular study is a few years old, and 46 cents isn’t a lot of money by any stretch, but this example goes to show how a store’s slogan is still no substitute for shopping around.

Target: The blog Consumerist has a whole tag dedicated to pricing discrepancies at the nation’s second-biggest discounter, full of reader-submitted photos of things like “value packs” of multiple items that actually cost more than buying two or more of the items separately would cost. This “deal” on disposable diapers offers a $5 gift card if customers buy two packages, but a sharp-eyed reader noticed that the promotional price per package was actually $2.50 more than the regular price sticker still on the shelf. And while buying bigger quantities usually means a lower unit price, coffee drinkers at this Target would be better off buying two smaller 12-ounce bags instead of an ostensibly more economical 24-ounce bags.

 

TIME Careers & Workplace

1 Trick to Getting What You Want When You Negotiate

Boss
MoMo Productions—Getty Images

You won't believe how easy it is

Conventional wisdom says that, in negotiations, it’s better to offer the other party a firm number rather than a range. The thinking is that a hiring manager who hears, “I want between $40,000 and $45,000″ will focus on the lower number, or somebody you want to buy a car from will jump on the higher number if you tell them, “I can pay between $8,000 and $8,500.”

That conventional wisdom is wrong. New research finds that people who offer a range really give themselves a better chance at getting the number they really want — but you have to do it the right way.

Columbia Business School professor Daniel Ames says there are a couple things going on when you negotiate with a range as opposed to a single number. For starters, there’s the psychological concept of “tandem anchoring.” When we hear a range, our minds are predisposed to take both numbers into account, not just the one that we want to hear.

“Our research shows that people receiving a range offer are often influenced by both ends of that range in estimating their counterpart’s limits,” Ames says.

The other psychological component at work is what Ames calls the “politeness effect.” While we generally think we drive a hard bargain when we negotiate, we’re not really as tough as we think we are. “We tend to think of negotiators as being reasonably shrewd and skeptical and self-interested,” Ames says. “But across multiple studies, that’s not what we found… When we look at the counteroffers that negotiators made, it was partly predicted by how rude or polite they thought it would be to make that proposal.” Even in cases where a negotiation is anonymous and buyer and seller don’t expect to cross paths again, most of us are still reluctant to be overly cutthroat.

The key to turning this into a number you want to hear — whether you’re landing a job or buying a car — is to give the other party what Ames calls a “bolstering range;” in plain English, tilt the numbers in your favor. If you want a salary of $50,000, tell the hiring manager you’d like between $50,000 and $55,000.”Range offers tend to shift what offer-recipients think about the offer-makers’ limits,” Ames says. “Adding a higher number… tends to tug assumptions about that limit higher.”

Now, Ames points out there are a few limits to this. “That doesn’t necessarily mean they assume the limit is the mid-point of the range,” he says. In one experiment where subjects were asked how much they would pay for a hypothetical catered event, those who heard the caterer’s estimate of $100 countered with an average of $77, although even those who heard an estimated range of $100 to $120 only offered an average of $83. “They didn’t all necessarily end up inside the range itself, but they tended to end up with more than they would have gotten with just the point offer,” Ames says.

So aim high, but keep it reasonable, Ames warns. “Range offers have some limits,” he says. “[They] tend to work best when they start at assertive, but not outrageous, levels and when they span a modest width.” In other words, if you want a $60,000 salary in a job offer, don’t suggest a range of $75,000 to $80,000. And don’t make the range so broad that it can damage your credibility, he cautions. “Range offers that go beyond normal widths, which tend to be 5-20%, tend not to bring extra value.”

Read next: 4 Subtle Mistakes That Are Ruining Your Chances for a Promotion

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TIME

Why Nobody Believes Cheap Gas Is Here to Stay

A Chevron gas station pump in Vallejo, Calif.
Paul Sakuma—AP A Chevron gas station pump in Vallejo, Calif.

We're bracing for the end of $2-per-gallon fill-ups

Drivers are enjoying the extra money in their pockets after a trip to the gas station, but economists can’t figure out why we’re not going crazy spending all those extra bucks. Now, two new reports reveal what Americans are really thinking: We don’t believe this cheap gas is here to stay.

A survey released las week by the Consumer Federation of America finds that 57% of Americans say the miles per gallon they’ll get out of the next car they purchase is “very important,” and almost nine in 10 say it’s either very important or important. That’s probably because, on average, we expect gas prices to hit $3.20 again in two years, and shoot up to $3.90 in five years. (The highest gas has ever been was in the summer of 2008, when the national average hit $4.11 per gallon.)

Another recent report yields similar findings. The J.D. Power 2015 U.S. Avoider Study finds that, for the fourth year running, a majority of new car buyers say miles per gallon plays a leading role in determining which car they buy. For 14% of car buyers, gas mileage was the top reason they picked their vehicle — trumping other important factors like looks and performance. “At the segment level, gas mileage is the primary purchase reason among buyers of compact, small and midsize cars and compact MPVs,” the release notes. And 16% of car buyers rejected a particular vehicle because it didn’t get good mileage, the second-highest reason people kick a car out of consideration.

In spite of low gas prices today, the pain of future fill-ups is never far from drivers’ minds. “Clearly, consumers are considering the total cost of ownership when selecting their new vehicle,” Arianne Walker, senior director of automotive media and marketing at J.D. Power, says in a statement.

The CFA’s analysis of how much we drove and how much we spent over a five-year period suggests we’re on the right track with this kind of long-term thinking, too. If you’d gone out and bought a gas guzzler that got 15 miles to the gallon back in January 2009 when gas averaged $1.84 a gallon, you would have paid $153 a month to fill up the tank (assuming you drove roughly 1,250 miles a month). That’s not so bad, but when gas prices rose, all those fill-ups would add up.

After five years, the CFA says you would have paid over $6,400 more on gas than if you had purchased a car that got 25 miles to the gallon instead. “Buying an inefficient vehicle during periods of low gas prices condemns the consumer to… a whopping overall increase in lifetime gas costs,” CFA director of research Mark Cooper says in a statement.

TIME Careers & Workplace

Why You’re Probably Going to Get a Raise This Year

TIME.com stock photos Money Dollar Bills
Elizabeth Renstrom for TIME

When companies battle for talent, workers win

Raises are back—finally. A new report says roughly 90% of companies will give raises this year, but workers are going to have to earn those fatter paychecks: More than half of companies responding to PayScales’s annual Compensation Best Practices Report say their main reason for giving raises is to reward performance; only about 20% say the increased cost of living is the main reason they give raises.

And don’t hold your breath for a windfall. The vast majority of these say raises will be 5% or less.

Still, this is an improvement. In its annual Compensation Best Practices Report, compensation research company PayScale finds that 85% of responding companies gave raises last year and 89% of companies say they’ll give raises this year. The percentage of companies doling out pay increases has crept up for the past few years, after hitting a low of roughly 30% in 2010, and was above 80% last year. In addition, three quarters of responding companies say they’ve adjusted their compensation structure within the past year.

Smaller companies are more likely to dole out raises to keep valuable workers on board — something to keep in mind if you work at one. Small firms also are more likely to have individualized salary ranges for each position.

About two thirds of respondents say they gave cost-of-living raises last year, with this practice most common in the healthcare and social assistance sector — almost three quarters of these companies gave cost-of-living raises. On the flip side, this is the sector least likely to give workers bonuses.

Companies that rely on large labor pools of lower-skilled workers may give cost-of-living pay increases because there’s not as many good ways to measure performance, and the relative competitiveness of the work often doesn’t demand it. “However, even in industries like retail and healthcare which have a lot of minimum wage positions, there are still highly competitive jobs in segments of their workforce,” like management and IT, PayScale vice president of marketing Tim Low explains.

In more competitive sectors, though, talented workers can command even more. Just over three in five companies said they’ll increase pay for jobs that are in high demand. “We see a strong trend towards pay for performance,” Low said. Professional, Scientific and Tech Services, along with Information, Media, and Telecommunications are the two categories — as defined by PayScale — in which companies are most likely to report that over 50 percent of positions are competitive.

“The trend has been emerging for a while, but it’s part of a greater connection between compensation and business outcomes,” Low says. “The current economy in many sectors gives employees more choices now than they had just a few years ago.”

Read next: Wal-Mart Is Giving Half a Million Employees a Raise

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TIME Careers & Workplace

These Are the Terrible Mistakes You’re Making in Your Job Search

resume
Getty Images

These common pitfalls can sink your hunt

Job seekers are feeling more confident about the economy and about their prospects, and more of them—especially young adults—report that they’re keeping an eye out for new employment opportunities even if they already have a decent job.

In a new survey, recruiting software company Jobvite finds that 45% of job seekers are satisfied with their current job, but open to jumping ship — and half of currently employed people looking for work characterize their current job as a “stepping stone” or “entry level,” a figure which jumps to more than 70% of job-seekers under the age of 30.

Here’s the rub: These people might not have as much success as they imagine if they engage in some of the behaviors Jobvite’s survey highlights.

Today’s job hunters treat the pursuit of career advancement almost the same way as they would buying something on Amazon, says Jobvite CEO Dan Finnigan.

“It’s almost like purchasing a product online, where the one-click shopping experience is now the norm,” he says. This attitude is especially prevalent among job-seekers under 30, he says. “As millennials especially are working longer hours and leading busier lives, they’re not wasting any time missing out on competitive positions… the tech-savviest ones are leveraging mobile to job hunt when the have the time.”

In addition to the nearly half of job-seekers who say they’ve looked for work in bed, 21% who job-hunt during meetings and the nearly 20% who use bathroom breaks to find a job, almost 10% say they’ve searched for work while out at a bar.

Although searching for jobs on a smartphone makes it easier to check out the options and apply for work anytime and anywhere, happy-hour job-hunting isn’t without risks, Finnigan says. “[It] could put you in a position where you’re more prone to making a careless spelling error or forget a detail in your contact information,” he says. “It’s important to devote full attention during this process of the job search,” a task that’s harder after you’ve had a couple of drinks.

Jobvite also finds that the use of social networks to score job leads is rising. Aside from Facebook, Twitter and LinkedIn, more people looking for work are hitting up Pinterest, Instagram and even Snapchat.

Again, while more avenues should mean a faster route to employment, job-seekers could create roadblocks for themselves if they’re not careful. “Any time you’re interacting with a company on social media, being professional, intelligent and careful is essential,” Finnigan says. While most professionals today treat LinkedIn as an extension of their “work self,” it might take a mental transition to think that way about a more freewheeling site like Snapchat.

And the temptation to exaggerate on social media spills over into people’s employment-related postings. Jobvite finds that 31% percent of job seekers inflate their skills on Twitter, and more than a quarter fabricate references on Facebook.

“People have been inflating and overstating their skills on their resumes for years, so it’s not too surprising — but it’s still a bad idea,” Finnigan says. “In today’s information-heavy age, this practice is even more risky,” he points out. With so much of our lives online today, it’s easier for people — such as hiring managers — to ferret out a fib.

TIME Spending & Saving

This Is What Keeps Rich People Up at Night

money-bill-stack
Getty Images

This is what keeps high earners up at night

When it comes to retirement, Americans’ biggest fears are that they’ll run up huge medical bills, or that they’ll outlive their savings and run out of money. But what’s surprising is which Americans worry about these things the most.

According to a new Bankrate survey, people who earn more than $75,000 a year worry more about healthcare costs in retirement than the population overall. Perhaps surprisingly, they also worry more than those who earn less than $30,000 a year.

That’s probably because while people at the low end of the income spectrum might expect to fall back on Medicaid as a safety net, this isn’t an option for more affluent Americans, points out Bankrate senior investing analyst Sheyna Steiner. “The more assets and savings one has, the more difficult it will be to qualify for government assistance,” she says. “Certainly, the thought that your entire nest egg could be wiped out due to illness or injury is chilling.”

Rich Americans don’t think they’ll be getting much help from Uncle Sam, either: More than three-quarters say they think Social Security will provide less than half — or none at all — of their income in retirement, the highest percentage of any income bracket and higher than the 66% overall who share this view.

People who earn more than $75,000 also have a greater fear that they’ll run out of money in retirement. Overall, 23% of survey respondents say their top worry is that their savings will run out, but 29% of those in the $75,000-and-up income bracket say the same.

Some of this is just a fear of the unknown — and possibly the realization that they have further to fall if they outlive their savings. “A major change of life like retirement is especially daunting,” Steiner says. “People with high incomes have the opportunity to save more but they can also spend more as well which is a trap too many people fall into.”

These fears persist despite the fact that about half of high-income Americans say they’re happy with the amount they’re socking away for retirement, compared to the 29% overall who say they’re happy with their current retirement savings. And even among those earning more than $75,000 a year, more than a quarter say just keeping up with basic living expenses is hampering their retirement savings.

“There’s definitely a contingent of high earners who are not saving enough for retirement,” Steiner warns. “Their current lifestyle may not allow them to save much which may force them to cut back as they get older.”

Steiner says that’s because the people who do have disposable income might not be able to resist spending it today rather than banking it for retirement. “People often spend above their means or right up to the limit,” she points out. “People who maximize their lifestyle without saving for the future run the risk of severely downsizing in retirement or running out of money.”

 

TIME Careers & Workplace

Think You Have Off Monday? No, You Don’t

200295029-001
Michael Kelley—Getty Images Don't waste time filing emails away

You're actually more likely to open and reply to email

This Presidents Day, most offices will be dark. But a surprising number of us will still be working, even on what’s nominally a holiday.

Yesware, an email tracking and analytics company, sifted through more than 23 million emails sent out by corporate users of its service over roughly the past year and took a look at email activity around three-day weekend holidays — Martin Luther King Jr. Day, President’s Day, Memorial Day, Labor Day, and Columbus Day. Its findings are kind of discouraging — and probably quite familiar to many of America’s overworked desk jockeys.

“On the weekdays leading up to and following a holiday, there is a noticeable bump in email volume,” Yesware’s report notes. We “cram” for the holidays before and afterwards by buckling down and tackling our inboxes, but our actual email usage doesn’t actually drop by all that much during the holiday itself.

“The move towards laptops, tablets, and smartphones can also make it more difficult to fully disconnect on the weekend — even when that weekend is followed by an extra day off,” says Yesware CEO Matthew Bellows.

The data shows that, while less email is sent, read and replied to on holidays, the drop isn’t nearly as steep as you might think. On a holiday Monday, people only send 40% less email than they would on a regular Monday, even though they’re technically off.

And while it takes people longer to get around to opening emails and writing replies back, the difference is only about 15 minutes — a strong indication that we’re all pretty much tethered to our smartphones all the time. Sure, you might leave your phone on the towel while you take a dip in the pool, or stick it in your back pockets while you take a hike, but we’re not really getting off the grid in any meaningful way.

The two holidays when people are most likely to take an honest-to-goodness break from the email madness are what Yesware dubs the “backyard bbq holidays,” Memorial Day and Labor Day.

Presidents Day is another story, though. “The email volume going out on President’s Day is actually much less compared to the other holidays and normal Mondays,” Bellows says. “The open and reply rates are indeed higher.”

Specifically, the number of emails people open as a percentage of the ones they receive are higher on the Wednesday, Thursday, Friday and weekend before, as well as the Tuesday and Wednesday after, Presidents Day, than on any other holiday with one exception: Open rates are higher on the Sunday before Memorial Day. The rate at which people reply to the messages they get shows a similar pattern.

The holiday has a spillover effect, too, Yesware finds: The open and reply rates the entire week of Presidents Day (Wednesday through Sunday before Presidents Day as well as Tuesday and Wednesday after) are even higher than they are on regular non-holiday workweeks.

Bellows says some of the high percentages of open and reply rates on holidays and the days surrounding them can be attributed to much lower volume. Since the sheer number of emails people get is so much lower, they ones they do get are more likely to get their attention.

“On any given day, weekday or weekend… people [are] constantly fiddling on devices. It doesn’t matter if you’re out in public or home on your couch, there is always a path to reach people,” Bellows says.

TIME Saving & Spending

If You’re Going to Buy a Car, Do It Now

A General Motors Co. Car Dealership Ahead Of Earnings Figures
Daniel Acker—Bloomberg/Getty Images General Motors Co. Chevy Malibu vehicles sit on the lot at JP Chevrolet dealership in Peru, Illinois, U.S., on Wednesday, July 23, 2014.

If you need a car loan, this is your year

Financing a car — especially if you have good credit — has never been this cheap. Don’t wait too long to take advantage of this, though. By this time next year, if not sooner, borrowing costs will be ticking up again.

Personal finance site WalletHub.com surveyed 157 lenders and consulted with experts in a new report about car loans. The average car on the road today is about 11 and a half years old, so maintenance and repair costs are likely to be mounting. More than half of the experts consulted for this study say interest rates are likely to rise within 12 months.

Right now, though, financing is dirt cheap. Among all financing sources, the average APR on a new car loan for someone with good credit is right around 3% for new cars and just over 3% for used cars. The picture is brightest for people with credit scores above 720. On average, these buyers can get away with paying less than $1,600 in financing charges over the life of a 5-year, $20,000 new car loan.

For a new car, if you go through the manufacturer, the average best rate is right around 2% for a new car and just under 5% for a used car. Nissan, Toyota and Chrysler offer the lowest rates for customers with high credit.

The average at credit unions is also under 3% for new car loans. (One note: While the study looks at each manufacturer’s APR for a 36-month loan term, most car buyers opt for 60-month loan terms, which tend to have slightly higher rates. These averages also assume the buyer has good credit.)

The best deals can often be found by financing directly through the dealerships, the study finds. On average, dealers are offering rates 35% below average.

The study also suggests credit unions as a good place to look for a car loan, with rates 25% below average). National banks offer average rates, while regional banks tend to be more expensive, with rates 40% above average. Still, your milage may vary, as the saying goes, so it’s a good idea to check out all your options.

It also pays to shop around if you plan to lease. Although the report finds that Nissan, Volvo and Infiniti offer the best lease rates, many car companies’ financing arms are still lacking in transparency when it comes to the actual APR you’re getting, so you don’t actually know if you’re getting the best rate unless you do some legwork before you get to the dealership.

Even people with fair credit can benefit from today’s super-low rates. The study finds that people with credit scores between 620 and 659 will pay an average of just over $7,000 over the life of the loan, a drop of nearly $500 over the past three months. Across all lending sources, the average APR for someone in this credit bracket is about 12.5% for a new car and just over 13% for a used car.

Since that’s a pretty sizable gap, if you’re thinking of buying a car this year, it might benefit you to take some steps to raise your credit score before you go shopping — you could effectively be saving more than $5,000 over the life of the loan.

 

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