Auto loans can help you drive your dream car for a bit higher premium than what you will pay traditionally. This is the price you will need to pay if you don’t have the money saved otherwise. A lot of people use this as a mean to get their favorite wheels. So if you are interested, better read the following tips to pick a smart scheme.
Get Financing Quotes
If you have a great credit history, and you know how to leverage it, you can get the best rate on auto loans. In case you don’t, you should try online stores as they will offer you something better. Just complete the credit application, and you will be given an interest rate and max amount you can spend on your car. You should know that lenders offer competitive interest rates on both new and used cars.
Keep A Short Term
Short term means lower interest rate, but a high monthly payment. When you want to finance your car, the salesperson will try to negotiate with a monthly payment instead of overall price. They do this to show low monthly installment to extend the term of loan secretly. This increases the overall price instead of decreasing it. You are not paying any less than your car; you are always paying more with auto loans, get this around your head.
Fact is, the longer you repay a loan, the more interest you will pay. Many time banks charge ahigh-interest rate for longer loans, this increases your cost credit.
20% Down Payment
You can control the interest rate if you make a down payment. For the best results, you need to give at least 20% of the whole amount as your down payment. Lenders don’t need people with good credit history to make a down payment at all.
Driving off in your new car without paying a dime as down payment can seem like bliss, but it can turn your life into hell. You may need to sell the car to make ends meet. You will have to pay high-interest rate. Therefore, the down payment is your security.
Consider Taxes and Extras
When it comes to auto loans, you should include other expenses such as sales tax, register fee, documentation fee, and warranties. They do make a slight difference, so you can’t just ignore them. There are dealers who will pay for these small discrepancies by their own pocket, but it’s hard to find them.
Refinancing A Car Loan
This is the hardest bit of auto loans! Let’s say you ran out of luck, but your credit is good, and thecar is in good condition. You can still have a way out with refinancing your car loan. It’s easy to get a refinance auto loansif you have good credit history. Just ask about the fee for applying to avoid paying a high premium. You need to be smart and pick a scheme carefully because it can really get you out of such turmoil.
