Saturday, March 26, 2016, AM | Leave Comment
When it comes to purchasing a new or used car, many drivers get what they pay for when shopping at the dealership or through private sellers.
Consumers often make the mistake of paying more than necessary for a vehicle due to a lack of research on the car.
To ensure you get a good car at a good price, there are a few financial secrets to keep in mind.
Pay with Cash
Paying with cash will allow you to have more power as a buyer when you’ve found the right car to purchase.
This can also persuade the seller to be more flexible when you’re negotiating a price or are making an offer.
If you can afford it, paying with cash can also save you more by avoiding debt and high interest rates.
Increase Your Credit Score
If you’re going to apply for an auto loan to get a new vehicle, it’s important to increase your credit score when trying to get approved by a bank or financial institution.
You can increase your score by paying off your debt and keeping your balances below 20 percent of your available credit.
You’ll also want to look for fraudulent activity or errors that you’re not responsible for to ensure they’re removed from your account by the credit bureau.
Get a Loan through a Credit Union
One of the most common finance mistakes car buyers make is getting a loan through a large bank or through the dealer after they find the vehicle they want to purchase.
Dealerships often hike up the interest rates and don’t offer the best deals on loans because there are incentives for them to get consumers to agree to the loan.
Major banks and financial institutions are also less likely to offer lower rates because they’re controlled by shareholders who want to make a profit.
Consider getting a loan through a local credit union for the best deal that can save you hundreds to thousands on interest during the term of your loan.
Places like Deseret First Credit Union can also get you approved before you buy your car, so you are ready to go once you make a decision.
Agree to a Shorter Term
Each lender offers consumers different time lengths on the loans that are available. Those who are approved for the loan can determine how long it will take them to pay off of the loan, which will break up the payments into different months.
The average new car loan is now 67 months, which has increased in recent years, and will require that more money is paid in interest the longer that it takes to pay off the loan.
Make it a point to choose a length of 60 months at the most to ensure that you save more money in interest when financing the vehicle.
It’s also important to try and negotiate the interest rate you’ll pay with your lender and attempt to refinance the vehicle in a few years.
When you’re preparing to car shop and finance a vehicle, it’s important to follow a few tips to get the best deal for a great car.
You’ll not only save more money during the ownership of the vehicle, but can allow yourself to afford the fuel, maintenance, and any upgrades that are needed on the car.Facebook.com/doable.finance