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Car Loans and Auto Financing

Car Loans and Auto Financing

  1. The first question when you intent to buy a new car is how much you have for the car. If you don't have enough, you should consider other ways such as to buy a second-hand vehicle or a car loan. You can get such loan at a bank, credit union or via dealer's own finance tool.

    Anyway, before you make any decision you should consider your possibilities and make some research about current options. Unless you can lose a lot of money in the face of experience, talkative and especially trained car sellers.

  2. You will need to think about your budget first. You should not think about a car much more expensive that you can afford. How to create your monthly budget? Well, you will deduct fix monthly expenses from your monthly net income. The fix expenses can consist of a rent, a mortgage, electricity bills, water bills, gas bills, phone bill, etc. Next step will be to deduct a rough price of other expenses (such as for example, food, cloths, school tool for your children...) from such resulting amount. The final result will represent an amount of money available for your new car.

    Now, you need to consider the fact that your expenses will not consist of a cash advance and monthly payments only. There will be many of hidden expenses such as registration and licensing, then insurance costs, fuel and maintenance as well.

    After all of that, you will get an idea about how much you can use for your car payments.

    Tip: You can roughly estimate your finance available for the new car payments by counting 20 % of your monthly net income.

  3. What else? Now you can start with seeking suitable vehicles that will fit into your budget. Your choice depends on your personal preference and purpose of usage. It means when you need to use the car for work purpose, you can use a vehicle such as delivery or hauling. If you intent to carry your family, you will probably prefer minivan or station wagons. Other criteria will be fuel mileage that is really friendly at compact cars.

  4. After you re clear about your budget and about your choice, you can start car price research that will take you a bit more of time.

    You can start with checking of the Internet, local banks, credit unions, car dealerships or newspapers. Check their interest rates, the lower the better as it will help you to save in the long run.

    Find some information about whom you want to buy from and about the buying process. Maybe you don't know that vehicle producers usually return a certain percentage of the price invoiced to the dealer who has earned them money. This is called an incentive percentage and you can find such information among car producer public prices.

    Tip: you can also investigate about rebates. Incentives are often offered when a car producer want to get clear of slow-selling cars or decrease the inventory. For that reason, such company may offer a rebate to the buyer (= the car dealer) and/or low financing rate.

  5. Finally, you probably understand the things around selling cars so you are ready to visit the car dealership.Keep in mind that car dealers are professional and they will try to push you even into the business that you don't want. If happened so, don't hesitate to leave and visit another car dealer.

    At any time, you should stick to the final amount available for you and not exceed for any reason!! Also don't let any car leader to change your idea about your car preferred.