How To Finance a CAr

Saturday, March 20, 2010

How to Finance Your Next New Car Purchase

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When purchasing a new car, you are most likely going to have to finance the purchase unless you have cash to put up front. Interest rates and loan terms are factors that can influence which loan you choose; since a car is a big purchase, knowing the ins and outs of getting a loan and financing is important for saving you money in the long run.

Before you even head to the car lot try to get pre-approved. This gives you less wait time than waiting for a loan approval and will have you driving on the road faster. Shop around for the best deals and make sure that you check both the interest rates and the terms of the loans.

Low interest rate loans can sometimes have very short repay periods and that means there is a possibility of getting stuck with high monthly payments if you don't do your homework. Discussing the loan terms with a representative is always a must before signing any paperwork.

There are also multiple ways to finance a new car purchase. Banks, credits unions, finance companies, and dealers all offer financing and each have their own set of advantages.

Dealers and finance companies typically are more willing to give out loans for less than perfect credit, but must be carefully used for loans because of high interest and low loan periods. Credit unions and banks are cheaper, but if your credit score is below par, then it may be hard to get approval.

When you have settled on a financing option, choose the lowest possible repay time that you can afford comfortably. Although the payment is higher, you will end up saving much more than if you choose a longer loan. Typically, the difference between a 4 and 5 year financing option can be as much as $700.

When the author isn't saving money on her own car purchase, she owns a company that manufactures Cadillac XLR windscreen windblocker wind deflectors.

Article Source: http://EzineArticles.com/?expert=Sarah_A_Novak

Labels: car purchase, finance new car, how to finance your car