Owning a car is expensive, from the initial purchase price to the regular maintenance and gas expenses. Many people get discouraged by the seemingly endless stream of expenses and decide to walk to work or take the bus. But what if you want your own set of wheels? There are many ways to get the money you need to purchase a car, from saving up cash to getting a loan. No matter which approach you take, making a budget and sticking to it will help to ensure that you are able to afford a car and still maintain your standard of living.
If you are looking for a car loan to finance your next car, you have come to the right place. Establishing a credit history is important, especially when you are buying a car because it will allow you to qualify for a loan at a lower interest rate. You will also be able to show a history of being able to pay off your debts. Your credit scores are not the only factor that will determine your interest rate. Here are some of the other factors that will determine your interest rate:
- Understand the credit score before you go to a dealership
Most of us have a credit score. It is a three-digit number that can have a big impact on the cost of doing business with you. There are lots of myths about how to improve your score, and these myths can cost you money. Many of these myths revolve around getting a credit card, and while this is not a bad thing to do, there are better ways to improve your score.
- Get a financing quote
Getting a financing quote can be a difficult task. You may want to finance a new vehicle or refinance your current one. Maybe you are looking for a personal loan to pay off bills or a loan to buy a new home. Whatever the case may be, it is important to know you have options to choose from.
You are in a rush, and you are at the car dealership. The salesman offers you a “0% financing for 63 Months!” Or “No money down!” Or “3.9% APR!” Those are all good deals, but how do you know what is a good deal and what isn’t? That is why it is important to get financing quotes, so you can start narrowing the options down and find the best financing deal.
- Keep terms short as possible and one that you can afford
Automobile loans come in all shapes and sizes, and the terms can vary greatly. While everyone’s situation is different, the length of the loan term is probably the most important thing to consider when deciding what type of loan you want.
- Pay the taxes, fees, and extras
The government is not going to give you a tax refund. They are going to take a large chunk of your money. That is just the way it works. If you want your refund, you are going to have to pay for it. It is a secret that the government doesn’t want you to know. The car dealerships don’t want you to know it either. They want you to believe that if you finance through them, they will pay for your car warranty and all the other taxes and fees that come with buying a car. That is just not true.
- Give 20% Down
One of the most common questions people ask when they are thinking about buying a car is: “Can I buy a car with a car loan and put 20% down?” Low and behold, finance and money answer the question in this post, “How Much Down Do You Need to Buy a Car?” Odysseas Papadimitriou, CEO of car loan, says, “the amount of car loan down payment you need depends on the type of car loan you are taking out. The longer the term of your financing, the more money you’ll need to put down.”
Although it is tempting to put as little money down as possible when you buy a car, doing so may not be a good decision. Putting 20 percent down requires that you come up with $4,000 or $5,000, but it will save you money in the long run. Why? Because you will be buying a car that is worth $20,000 or $25,000 for $16,000 or $19,000.
The rule of thumb is that new cars lose about 10 percent of their value as soon as you drive them off the car lot. If you put down only 10 percent or 15 percent—or less—the car will lose value faster, which means you will end up owing more than the car’s
Buying a new car is a major purchase, and so is financing that car. Financing your car means you borrow the money to pay for the car and then pay it back over time. Financing allows you to spread the cost of the car over a longer period, and it is less expensive than a cash purchase. When you buy a car by financing it, you need to budget for the monthly payments.