4 Car Financing Tips to Help You Cruise With Confidence
car financing
While buying a new car can be exciting, that excitement quickly turns to dread when you realize how much it’s going to cost.
New buyers are likely looking at a loan that may last five to ten years, and the monthly payments are a challenge to get used to.
Not sure what to do to get started on your new car purchase? Read on for the best financing tips to make this process easier on you and your wallet!
1. Get a Used Car
When looking for your next vehicle, consider minimizing costs by opting for a car that is pre-owned.
Used cars are much cheaper and easier to find financing for as opposed to purchasing a brand-new one.
If you take good care of your used car, you can eventually resell it in a few years with minimal depreciation.
Of course, it’s important to always take a test drive to ensure that the car you purchase is in good condition.
2. Budget for Down Payments
If you’re financing your new car, make sure you have enough money saved up for at least one down payment.
In most cases, it’s best if you put 20% down on your vehicle. This way, interest rates will be lower (the dealership may even give you a discount) and insurance will be more affordable since you won’t have as much loan balance.
When making calculations, use an auto loan calculator.
3. Ask for a Loan
Consider asking a lender for a loan to purchase a car. Not all banks offer auto loans, so make sure you have multiple options before making an application.
A bank representative can tell you what products they offer and help you figure out which loan is best for your situation.
In addition to information about interest rates and repayment periods, sales representatives should be able to provide you with estimates on how much your monthly payments will be.
Make sure these estimates are inclusive of all fees that may apply—such as additional financing costs—and decide whether it’s better for you to pay more each month or pay off your loan sooner.
4. Consider Secured Credit Options
Many people assume they need to take out an auto loan when they buy a car. While you may eventually be eligible for one, it’s generally easier and more affordable to get financing with secured credit.
By securing financing through your credit union or bank, you get access to lower interest rates, longer repayment periods, and sometimes even more cash upfront than you would through an auto loan.
Secure financing is particularly helpful if you have bad credit or can only afford a small down payment on your vehicle.
If you’re in the market for a new car, there are several things to think about when it comes to financing. Keep this information in mind as you learn more about the best ways to finance your car.
Category: Car Purchase
