Five Tips For Financing Your New Vehicle

Monday, September 30, 2013, 1:00 AM | Leave Comment

Finding financing for a vehicle can be the toughest part of the car buying process. If you have questionable credit, or a lack of a credit history, it may be difficult to get a loan with a reasonable interest rate.

Here are some good tips that you can use the next time you are at the dealership.

Five Tips for Financing for Your New Vehicle

  1. Get Financed On Your Own

    Getting private financing through your bank or credit union can make it easier to find a car that you can afford. When you know how much you are approved for, it limits your car search.

    It may be possible to get the best interest rate when applying for financing through your bank or credit union so you know ahead of time how much is a reasonable amount spent.

  2. Have Your Dealer Shop Around

    The car dealer has ties to many different dealerships. When you get the point where you are searching for a lender, make sure that you ask for the lender with the lowest interest rate. Otherwise, the dealer may decide to go with the first lender that says yes.

  3. Negotiate A Lower Sticker Price

    The sticker price on a car is not the lowest price that you can get. Take a few minutes to negotiate the price of the car down $500 or $1,000 to ensure that you are getting the best deal. You can inspect the car yourself to see if it has any obvious flaws to negotiate on.

    Even if the car doesn’t have the right recommended size of tires, you can use this as a negotiating factor. If you can’t get the dealer to budge on the sticker price, insist that you get extra on your trade.

  4. Put Money Down

    It is always a good idea to put money down when financing a car. While there is no recommended size to your down payment, you should try to put down at least $1,000 if possible. This lowers the amount that you need to finance later on.

  5. Worry About Your Monthly Payment Last

    You can’t judge the deal you get on a car by the monthly payment alone. All the salesperson has to do is offer you a longer loan term to get your payment to where you want it to be.

    However, you will be paying more interest over the life of the loan. The only thing that you need to be concerned about is your interest rate, and the amount that you are paying for the car.

The next time you have to finance a vehicle, you should do so with care and caution. Make sure that you get the best price for the car, negotiate your trade and then worry about the monthly payment. This ensures that you are getting the best value for your money.

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