Car Club Blog

The Federal Reserve met on Wednesday and cut a key interest rate by a quarter of a percentage point.  This cut affected the Federal Funds Rate, or the percentage rate banks use to loan money to one another.  After Wednesday’s cut, the Federal Funds Rate is now at 2%, down from 5.25% in September.

“I am glad to see the Federal Reserve taking action to lower interest rates,” says Ron Sturgeon, owner of a business specializing in luxury car rental in Dallas, Texas.  “They have a tough job right now fighting inflation and the threat of a recession.”

Even though the rate cut is likely to affect home equity lines of credit and even some adjustable rate mortgages, we may not see much immediate change in rates for fixed mortgages and other fixed loans.  Auto loans, which are usually a fixed rate, usually take at least two weeks to adjust to a rate cut.

“In this economy, people are less and less likely to run out and buy that Lamborghini Gallardo or Bentley GTC,” says Sturgeon.  “Besides the high cost of buying an exotic car, even owning one can be hard on the pocketbook.”

Since it may be a while before auto loans drop in conjunction with the Fed’s rate cut, there may be a marked increase in the rental of exotic cars.  Other options for driving exotic cars are also becoming increasingly popular. 

Car clubs are one of those options.  Exotic car clubs allow members to share an entire garage of amazing cars, giving them a chance to drive a Lamborghini, a Ferrari, and a Bentley in the course of a month.  Owning a single exotic car does not offer that kind of variety.

“Exotic car clubs are a great way to drive your dream car without taking on the debt of a new car loan,” says Sturgeon.  Learn more about the car sharing concept at http://www.dfwelitecarclub.com. Find a club in your city by consulting a directory of exotic car clubs, such as http://www.exoticcarclubs.com

There may be some negative effects associated with the Fed’s rate cut.  Experts are concerned about rising inflation, and many predict that the Fed will meet again to raise rates later this year.
Kate Miller-Wilson is a freelance writer living in the Twin Cities.  Visit her website or email her for information about her freelance writing services.