If you are seeking car financing to purchase or lease a car, it’s important to become as well informed on the topic as possible. Your goal should be not only to find the appropriate vehicle for your needs, but also financing on terms you are comfortable with. You should be willing to shop around and seek the best price for the car you’re buying, as well as a loan that works for you.
Are You Trading in an Old Car?
Trading in an existing car can help lower the cost of the new car. You should, however, do your research and make sure you’re getting the car’s true worth. Make sure you look your car up using Kelley Blue Book and learn it’s true value.
In many cases, you can do better by selling your old car privately and using the money as a down payment on the new car. Private buyers will generally pay more for your car than a dealer.
Investigate Multiple Funding Sources
You will usually have several options for getting an auto loan. You should check with your own bank, credit unions and any other sources you can find. Carefully compare the terms before you make your final decision.
When financing a car, you have a choice when it comes to how long you have to pay it off. A standard term loan is generally 36 or 48 months -in other words, 3 to 4 years. You may be tempted to choose a loan of longer duration, but these usually involve higher interest rates. As a rule, the longer you have to pay off the loan, the more you end up paying in total.
Consider Your Budget
Before financing a car, it’s essential to plan out an accurate budget. People who are anxious to drive away in a brand new car are often tempted to sign up for monthly car payments that end up putting a strain on their budgets.
Keep in mind that you will have to make these payments for a long time, usually several years. Consider all of your expenses, leaving room for unexpected ones and emergencies.
Negotiate the Best Price
Whenever you buy a car, you should find the best possible price. There is usually room for negotiation when purchasing a vehicle. When you decide what make and model car you want, shop around and find out who will give you the best deal. The next step is to research all of your financing options and choose the one that is most advantageous.
