Tips For New-Car Buyers Who Need Financing For At Least Part Of The Car’s Cost
posted in General Information |The best way to buy a car is to pay with cash, but almost two-thirds of all new-car buyers need financing for at least part of the car’s cost. You can get a loan from a bank, credit union, savings and loan, or a loan company. Most dealerships will also offer some sort of financing.Regardless of where you get a loan, if you can, you should put down the largest down payment you can afford and aim for the shortest payment period. The difference in total interest payments between a three-year loan and a five-year loan can be substantial. It’s always a good idea to talk to someone at a bank or credit union before you buy a car in order to get some idea of what your car payments will be.Special low financing rates offered by a dealer can be a good deal or can be deceptively low. Here are a few things to watch out for if you are considering financing your car through a dealer:Sometimes the very low advertised rates apply only to specific cars or models and the dealer may not be willing to negotiate on the purchase price for those cars.Low cost financing may require a sizable down payment and a short-term loan.Typically, the finance person at the dealership will try to sell you credit insurance, a policy that pays off your loan if you die or become disabled. Many people already have insurance polices that cover death and disability, or just can’t afford the extra cost. When a customer buys credit insurance, the cost is added to the cost of the car so the buyer ends up paying interest on the insurance premium.What is the biggest new car financing mistake made by buyers? Trying to buy a new car without checking online auto loan rates or knowing if their credit history can support getting an auto loan. Many problems stem from buyers who see the 0%