How To Get The Cheapest Car Loan
The auto market is recovery after more than 4 years of steady decline. Ford, GM, Honda, Chrysler, and even Toyota, despite it huge recall fiasco, are all reporting increase in sales . In 2009 14 million cars were scrapped while only 10 million new cars were sold, but with the loosening of auto loan rules car purchase in the first quarter of 2010 seems promising.
With many Americans now in the market for new cars, a word of advice is in order:
Find a car that suits your need and budget
Get a car that suits your lifestyle and budget
Your friend car may be appropriate for him, but may not be best suited to your lifestyle needs nor does the price tag jibs with your budget . Auto buyers are advice to assess their budget and needs before reaching a firm decision. In addition, if you have a large family a mini van or large SUV would be more appropriate than a sports car.
Bargain for the Cheapest Rates
Don’t go to the dealership or showroom with the expectation that the dealer will be responsible for financing the car. Dealers usually offer financing through a pre-existing relationship with a bank and have an interest in charging you a higher interest rate than the bank is offering. In fact, the dealer will try to make an additional profit of 1 to 2 percent interest on the loan. Go to the banks or credit unions in your local community and get a pre-approval for a car loan from the ones that offer the lowest rates. If you are not satisfied you can venture online for more broad competitive offers. With a pre-approval you will not have to go through the usual car salesman talk. No hassle, you just have to negotiate the bottom line.
Choose the Least Expensive Most Reliable Model
Get the latest information on the prices of models and deals offered by auto makers by visiting sites like Edmounds, Bankrate.com, Kelly Blue Book and NADA Guide. Many auto makers offer huge discounts to car dealers to move the previous year’s models to make room for newer ones. Also, think about purchasing a reliable vehicle with high resale value and many years of manufacturer warranty. A car with a high resale value will decrease the cost of your future purchase as you will receive more for your trade in. In addition, rates vary for different models. Toyota, GM, and Ford all offer 0% financing but only on certain models.
The Duration of Your Loan Matters
The length of your loan will ultimately affect the amount of interest you pay. A longer term loan will result in a lower interest rate but in higher total interest paid which results in a higher loan amount.
Consider a High Down Payment
Many car manufacturers will have a minimum down payment, do not settle for that. Make a down payment as high as you can. A high down payment will result in a lower interest rate and shorter length of the loan. In additional, making a high down payment may recuse you from paying certain closing cost and administrative fees. Ask for fee waivers and discounts, long term warranty and free gas and tire rotation. Many times you do not get because you do not ask.
