Many people dream about buying a new car, however, one of the biggest obstacles to this dream is cost. Unless you are one in the minority who can pay cash for your next new car, educate yourself and do some research on car loans before visiting the dealer's financing department.
One of the biggest costs when financing a car is the interest rate on the car loan. There are a variety of ways to financing your car. Many car buyers do not know that they can arrange their financing independent of the dealer, therefore avoiding the dealer's financing and game and saving both time and money on their new car purchase.
Be aware of your financial situation and research what you need. Just because you qualify for a $50,000 car loan doesn't mean you have to purchase a $50,000 car. If you are in a tight spot stick with a sub -$20,000 vehicle model. Do some research online and rate prospective vehicles by their initial price, reliability, maintenance, and nowadays, gas mileage. Sure, you may be able to find a gas-guzzling model which costs a thousand dollars less than any of its competitors, but if you have to fill it up twice as much your savings will diminish substantially.
You can shop around online for your car loan before visiting the dealership. Approval usually occurs with an hour, and you will be presented with several loan options to pick from, allowing you to choose the one which works best for your situation. Whether you have good credit, no credit, or bad credit, a car loan can be found for you. Many companies also work with people with past bankruptcies, so don't think that your situation is hopeless just because you have had some problems in the past.
Once you decide which car and loan to go with, print out your documentation and visit the dealer. When you already have arranged your loan you can shop at the dealership like you are paying with cash. The dealership may offer to finance you anyways, by all means let them if you want to see what they offer but do not let them know the terms of your existing loan. If their loan has a lower interest rate or lower monthly payments, look over their terms carefully. A lower interest rate or monthly payment may catch your eye but if the length of the loan is longer then that is more money and interest going to the dealer's pocket. Also, the dealer's loan may include dealer financing charges or other fees designed to put more money into the dealer's pocket.
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