Car Loans - When You Just Can't Wait To Buy A Car
After buying your own home, one of the most expensive purchases
you will decide on is buying a car. Along with the car,
car-related expenses, like fuel, maintenance and insurance, even
accessories, can get a big chunk from your budget.
Sure, you will be kicking a few tires but that will only be half
of the battle. Know your limitations even before looking for
that new car. If you would be paying for all car-related
expenses, don't forget to spend no more than 10% of your total
earnings.
When negotiating for the price of your car, decide first on a
price range and how much your down payment will be. Should you
choose a long arrangement under a car finance loan, your down
payment would be at the minimum. If you decide to trade the car
within the first year, you will realize that you actually owe
more than your car is worth. As a general rule, never apply for
a car finance loan that is more than 80% of the price of the
car, as indicated in the dealer's invoice. Try to pay in cash or
have equity for the car which is about 20% of the car's true
cost.
Usually, your car dealer will send you to their in-house
financing department for a car finance loan. Dealers may have
less-restrictive requirements than banks, however, they could
insist on cut-rate car financing loans for you to apply for.
Such car finance loans have 3% interest rates that could be
attractive for the unsuspecting customer. Unfortunately, these
low interest rates only apply only to certain models or short
term car finance loans of 12 months tops. You'll be surprised at
how dealers make a lot of money on car finance loans, even when
it's done through the manufacturer.
As a good rule of thumb, always negotiate the price before you
reveal that you are thinking about applying for a car finance
loan. If they know ahead of time that you plan on wrapping up
the deal with a car finance loan, they will frequently try to
create a dilemma for you by giving you a lower rate on a higher
price or a lower price at a higher finance rate. If you do
decide on a car finance loan through the dealer, you can
negotiate the interest rate. Dealerships usually have several
loan sources, including local banks and the manufacturer's
credit company. Each source sets their rates to the dealer.
It is important to investigate other sources for a car finance
loan, such as your bank or credit union, before you sign your
name. Choose from several sources for car finance loan options.
Find out from banks or credit unions if they have any special
deals on car finance loans right now. Use a Car Finance Loan
Worksheet to compare various sources. With so many choices for a
car finance loan, you need to learn so much. Always consider
your financing carefully. Open your door to several
possibilities while weighing your choices with caution. Come up
with a shopping list of what you are looking for in a car
finance loan deal. When you become well-informed, chances are,
you will be saving more money and get the right car for your
budget.
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