Only if you've got cash to throw around,
purchasing a vehicle outright is not realistic for most
Americans. Taking out an
auto loan for assistance in the financing of your new or
used car is very popular. Below are some tips that will help you
get the best loan for your money with minimal interest rates and
costs. As a responsible car buyer, you'll want to check out the
much to spend on my new car' section.
Understanding the Difference Between Car Loans vs. Mortgages
You want to purchase as much house as you can when buying a
home. As a result, leaving the least amount of money possible as
your down payment is not a bad idea. The value of your home is
likely going to appreciate over time. However, the value of your
car depreciates the second your drive it off the dealer's lot.
Therefore, when utilizing a car loan, your goal should be leave
the most significant down payment possible. Doing so will equate
to you having to borrow less and deflect any hit from
Understanding Auto Loan Interest Rates
No matter if you are buying from a dealer or private seller, you
are always going to want to do research by comparing auto loan
interest rates from multiple sources. You would be surprised at
how rates and terms will vary from lender to lender. Sites like
comprehensive and up-to-date information for interest rates of
all the top banks and lenders.
When purchasing an automobile from a dealer, you do not want to
discuss the need for financing only until a final price has been
discussed and agreed to. If you do mention your plans to finance
to the dealer, they are likely going to jack the price up on
you. Same as with any plans of trading in your old vehicle.
Don't mention only until the deal is done for the same reasons.
Car dealers are very aggressive...always looking to get as much
as they possibly can out of you. Most commonly by raising the
price on your purchase any way they can.
Understanding the Varying Lengths of Car Loans
The amount of time you utilize a car loan for is an important
decision. Typical car loan lengths range from 36 - 72 months (3
- 6 years). The longer financing term you select will equate to
lower monthly obligations. BUT...you are going to pay
significantly more in interest over the duration of the loan as
If you find yourself trading your car in every couple of years
then you should probably steer clear of longer term auto loans.
Even if you attempt and sell your vehicle at the conclusion of
two years of owning and you still have a few years left on your
loan obligation, you will lose significant money. Why? You will
be up-side-down. Meaning that you will owe more than the car is
Interest of New Cars vs. Used Cars
New auto loans have lower interest rates when compared to used
auto loans. Therefore, if you are looking to save in interest
payments, consider buying a new car. But, you may be able to
purchase a 'certified pre-owned car' which will equate to being
able to buy a used car with interest rates close to those of new
Getting a Copy of Your Free Credit Score
Prior to submitting an application for any type of car loan, you
here to get a free copy of your credit score. You want
to check your complete credit profile so that you can ensure
that all of your information is accurate and current. Having
errors on your credit profile may not only negatively effect the
interest rates you receive for you auto loan, but may even
jeopardize your ability to achieve approval.
Learn more about the value of getting your free credit