Author: Jeff Neilan Added: February 9, 2010
Know how much you can borrow, at what rate, and for what length of time. Once you do this it is very important to then plug of the numbers on the car that you have researched into some various length of time and interest rate scenarios... and by the way, once you do this right the results down... don't try to commit this to memory. Article Before you get all warm and fuzzy about a particular car that you are looking and head off to the dealership to do battle for the coveted chrome, get you financing lined up first. Know how much you can borrow, at what rate, and for what length of time. Once you do this it is very important to then plug of the numbers on the car that you have researched into some various length of time and interest rate scenarios... and by the way, once you do this right the results down... don't try to commit this to memory. Looking at all the various scenarios between the amount borrowed, length of time, and at what rate pinpoints for you what the best use of your money really is. For instance, more often than not, opting for all the available rebate monies back to you instead of letting the dealer use your rebate money to offer you 0% financing - is a better deal if you use that same money as a down payment on a low interest loan. Bottom line... plug in all the numbers - 0% isn't always the best overall deal. You own bank or credit union is the best place to start. If you've been banking with your financial institution for some time you'll have a much better comfort level beginning there. Generally speaking you'll probably find your best available rate at your local bank or credit union. Credit unions many times are the lowest available. Online lenders over the years have really refined the www process to the point that it is extremely hassle free as well... and many offer attractive financing rates. Online financial companies such as Capital One and eLoan will get a check to you in just a few days that you can either use at a dealership or for a private party purchase. With the recent trend in low interest rates, home equity loans to pay off higher interest debt and even include a new car in the transaction have become a conduit for a purchase. Although this can be an option, I'm not a big fan of adding the burden of a depreciating asset (a car) to your appreciating asset (your home). Depending upon your situation, you may want to discuss assistance from your family. For young people or first time buyers with little credit history it may be difficult to get approved for the amount of purchase such as a car. If you can make financial arrangement with a family member to at least help you with a larger down payment, you may then be able to get approved finance the rest. This way, you can purchase a vehicle and begin getting a good start on establishing your credit. Of course, there is the dealership financing department. Be very cognizant of the fact that the finance department at a dealership is responsible to ownership to turn a profit... not to offer you the lowest possible interest rate. If you go the dealer finance options... know that negotiating the rate is an available option. Plus... if you have already got a firm rate and term commitment from your outside source, you can leverage this at the dealership by having them compete for the best rate. In summary, you not only want to line up your financing first... even before you pick out a specific car. Then you want to plug the amount, the rate, and various terms into your calculator and determine what it the best deal for your personal budget and situation. Then, and only then, should you venture out to the car lot.
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