Your Simple Guide to Financing a New Car
Tuesday, September 29, 2020, 6:00 AM | Leave Comment
New cars are not getting any cheaper, so it is a good idea to plan your budget in advance before buying one.
You won’t need a huge amount of cash up front, but you should be ready to handle those new car payments as well as a possible auto insurance adjustment.
Here are some tips that can help you to finance a new vehicle.
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Shop for the Best Deal
Check with your bank or credit union for loan terms on new cars. Sometimes a promotional offer will be available with a low fixed interest rate or variable rate. You might also be able to negotiate a low-interest car loan based on the number of accounts you with the institution as well as your willingness to have monthly car payments automatically deducted. Low interest or a longer payment plan can keep your monthly payments more affordable and compatible with your income and expenses.
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Sell Unused Items
This is a great time to clean out the house and garage to get rid of things you no longer use. You can sell clothes, toys, tools, and furniture at a yard sale. Bigger items like older cars, motorcycles, bicycles, and lawn equipment will bring in more cash. When you pool all your earnings from unwanted items, you may have enough for a nice down payment on a new car, which will lower the monthly payments.
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Borrow from Your Savings
Tap investment accounts, savings accounts, and discretionary income for a down payment and the first several payments of your new car loan. Then, as you receive windfalls from job bonuses or cash gifts, use these funds to repay what you borrowed to finance the car. You might have a give-and-take approach for buying your car, balancing supplemental income with savings withdrawals to make car payments. In time, your earnings may increase, or your debt might decrease so that car payments become easier to manage.
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Get a Second Job
Look for a temporary or permanent part-time job to finance your new vehicle. Depending on the amount of time you have in your schedule as well as any special skills or interests, you can walk the neighbors’ dogs, help people prepare tax forms, or write online Web content for added income. There are plenty of side jobs you can get that would likely cover your monthly car payment.
Start working on your new car payment plan now so you will be ready for the financial commitment. With plans in place, you won’t have to worry about the monthly payments.
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