Know How To Finance! Purchasing A New Or Used Car?

If you’re buying a new car and paying cash … Congratulations! And for you, there really isn’t any need to continue reading this article.

Okay, for the rest of us who aren’t blessed with an overabundant checking account … Chances are you need a little financial assistance for your new or used car purchase. Should you finance with the dealership or obtain your own car loan?

Let’s take a look at each option.

Dealer Financing

I must admit, car dealers make buying your car relatively easy. It’s truly a one-stop shopping experience!

And you can’t beat the ‘office hours’ they keep. Evenings, weekends, holidays … seems like the car dealer is always open! For those on a tight schedule, this added convenience is nice.

Car dealers also offer some really good rates, but you it’s important to read the fine print. There are often stipulations to qualifying for that low APR.

The special rate may only apply if you’re a first-time car buyer. Most likely, this great rate is reserved for only those with an excellent credit rating.

Something else to be mindful is that highly advertised 0% or 1.9% might only pertain to the first year. (Yes, this does happen.) Make sure the rate being advertised is for the entire length of the loan.

You might think it’s the old ‘bait and switch’, and you may be right. So be sure to double check the qualification factors for that great rate before heading to the car lot.

Financial Institutions

Another financing option, and my personal favorite, is going through your local bank or credit union. Contact them first before being hypnotized by the shiny new automobiles!

Your local bank or favorite credit union can tell you exactly what your monthly payments will be for a given loan amount. And they’ll provide you sound advice on what you can afford.

If approved, they’ll issue you a buyer’s authorization check you can use at any dealership. (After you’ve negotiated a rock-bottom price that is!)

And you don’t have to worry about your credit union ‘up-selling’ you on additional features that cause the loan amount to soar. Well, perhaps some low-cost life or disability insurance but that’s a pretty cheap and smart investment.

Buying a car is usually the second largest purchase you’ll ever make. And you want to ensure the deal you’re getting is a good one. Heck, the best one!

So if purchasing a new or used car is in your future, do yourself a huge favor and learn as much as you can before you head over to the car lot.