Best Way To Save Money Buying A Car? Shop For A Loan First.
Searching for the best interest loan is very important with the way the cost of purchasing a car keep growing day by day.
It was estimated in 2018, that the average rate on car loans is about 5.5 percent and an average costing about $33,000 dollars, which invariably means that a buyer will have to pay thousands of dollars on a loan of about 60 months.
The debt of securing a laon is usually very worrisome as it was discovered that about 47 percent of people who have got a car loan have lost there happiness because of the magnitude of the debt in front of them, and this is why any one seeking to take a loan for car needs a very smart kind of strategies.
Below are the five (5) things that financial automotive experts say will help you fit into a kind of financing that correlates with your budget.
CHECK YOUR CREDIT
Firstly, you must know your credit score, because this your credit score will allow you to know the interest you are going to qualify for.
Knowing your credit score will also make you to fix any problem on your credit report even before entrying the car buying process.
You could refinance into a lower rate and payment once your credit is very stronger than when you started your loans.
Many personal finacnce websites, credit cards issuers and banks will always be ready to show you your credit score easily and free.
SHOP AROUND FOR THE BEST RATE.
Before you go into the car shopping or purchasing process, you should first do serious work on the rate shopping process earlier enough as this could save alot of money.
There is a lot of options available to people who seeks loan to buy cars, and infact credit unions tends to offer some of the lowest rates and the best customer services, a statement from Sonia Steinway, who is the president of an auto loan company outside financial
The following terms must be kept the same in other to compare loan offers.
A) LOAN AMOUNT:
Sales tax and fees will always tend to increase the amount of money you will borrow in addition to the actual price of the car
B) DOWN PAYMENT:
When you put more money down for down payments, it reduces the amount of money you will have to borrow saving you from alot of interest rate and it also help to qualify you for a more better rate.
C) LOAN TERM:
About 36 months is recommended for used cars while 60 months for new cars.
DESIGN A LOAN YOU CAN AFFORD
Using a car loan calculator is very important to be able to know how much u will be paying monthly once you know the interest rate you qualify for.
And in the course of the payments, you should not use more than 10 percent of your monthly take home salary for the payment of loan and in total car expenses which includes; insurance, gas, maintenance and repairs, you should spend less than 20 percent in all.
in trying to refinance your loan, try and use an auto loan refinance calculator to show if you are actually saving money through refinancing.
GET PREAPPROVED FOR CAR LOAN
It is always best for you as a buyer to apply for financing before you get to the dealership, then when you get there, you now ask the buyer to beat down there rate. Preapproval can always help to get the best competitive rate.
The zero financing loans are always very difficult because the loans are not offered as frequently as before, therefore it is always better to just seek a low interest financing deals and other incentives by searching the car makers websites for useful information more often.
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CAREFULLY REWIEW THE CONTRACT
It is always very good to cross check the contract documents very well as there are mistakes that can either be intention or maybe unintentional. You can double check the numbers using a loan calculator and make sure all the number add up very accurately.
Make sure the lender do not add up any extra items you dont want like maybe a gap insurance or an extended warranty, and never keep mute on any extra charges other people doesn’t charge or other charges you weren’t told from the initial.
Originally published by:- huffpost.com
Image Credit :- NerdWallet.Com