May 11 2016
How auto financing should be done
Auto financing is a very important part when you are buying a new car. It should be done the right and intelligent way to avoid making mistakes which can be really costly later on. Never put down money more than you can afford. Don’t get excited, be smart and think what you really need and try to keep the term as short as possible within your budget, of course. You should not forget when you are buying a car that the sticker price includes the invoice price too, means the price that the dealer has paid for the car.
Try to negotiate; you need to be smart when you are doing auto financing. For example, if you are financing your new car for four years at arate of 6% with not giving any down payment. You will be paying more than $2500. But, if you finance your car for three years at 4% rate with giving a down payment of $1500, you will be saving more than $1000. Now, tell me is that smart or not?
Your credit score is important forauto financing
Getting the best car loan is very important, with high rates dealers make a lot of money. You should go for a lower rate which is not going to be much of hectic for you. Understanding your credit score is the most important thing, you should check your credit score before you get a loan for your car.
What you need to know about credit score is that credit score below 650 is considered poor. This results in buyers to get a loan rate of 10% or more than that, so they need to look around more and get the lowest rate available. People with more than 700 credit score is considered very good, and they get the best loan rates of 2% or even 0 if available. What people make mistakes are thinking they will get these loans, but they are not aware of their credit score which needs to be good enough for their auto financing.
Short term is the best forauto financing
Most people think while auto financing is that the more time they to pay their loan of their automobile is better. But, they are going to the wrong way. The less the term is, the better it is because you will be paying a lot less. If the term is more the interest is more. Short term means smaller interest rates. So, think again before going to the dealer and finance your car.
Paying 20% of payment as down is considered good forauto financing
It may not seem to be a good idea at first when you see good deals where you don’t have to put any down payment to buy a new car. But, to be honest, it is. If are in need of sudden money and have to sell your car, you won’t be able to because the loan of the car is more than its worth. So, paying 20% is a good move.
If you consider these tips before buying a new car for your family, you may end up smiling rather than thinking about the loan all the time.