How to Buy a New Car Auto Financing — Volkswagen

4 Янв 2015 | Author: | Комментарии к записи How to Buy a New Car Auto Financing — Volkswagen отключены

It’s all about the benjamins

you are independently wealthy or have of dollars in savings, you will certainly have to get a loan. If you the cash to pay in full, you are in the best position. People think obtaining affordable auto is a painful, humbling or potentially process and they’re right. being informed ensures you not only make a smart but puts you in the best position to

Do Your Homework

You are not only in the to buy a new car, but to save money Spending less on a new car starts your car loan. 73% of all new car purchases are so unless you are in the remaining 27% you will to either take out a loan or through leasing.

Cash Everything Around You

If you have money to buy a new car outright do it! If the space your mattress is filled cash and you can afford to buy a new car without out a loan or agreeing to a lease, you end up saving the most money. If the bed is then you will have to The more money you use as a down the more money you will on interest it’s that A four year loan at an rate of 7% on $16,000 instead of will shave $600 off the cost. Not only will you $600 in interest, but you will your monthly payments $478 to $383. Experts paying at least 20% of the price of the car as a payment to help minimize monthly payments. You can also use the of your trade-in to get as close to 20% as Click here to calculate down payment, interest and other factors to get an accurate loan estimate.

Before You Look for a Loan

your FICO, also as your credit score. if you have excellent credit, it is to benefit to find out exactly your credit score is. It determine how much interest you pay during the period of your Most people don’t their score and usually are to find out. However, if you bad credit, it is much better to it before you’re trying to a low payment at the dealer. You never though you might be pleasantly by your credit score. your credit report here .

An example of how your credit how much you end up paying: If a car costs

Excellent credit (700+ at 6% interest for a 3 year loan =

Mediocre credit (620+ at 11% interest for 3 years = $30,696

credit (under 620 FICO) at 18% for 3 years = $33,895

Cash in = $26,000

Term Length

In speak, the number of months to pay off the is called the term. The shorter the the more you’ll save. Each payment you make more interest you’re

Shorter is Better: When the length of a loan, you must a few options. If you can afford higher during a shorter term months), you will save If you want lower monthly that will stretch a longer period (48-60 you will actually spend money because of the interest and the of becoming upside down are

Don’t Get Upside Down: upside down means you owe more money on the loan the car is worth. When you take out a on a car there are two factors at play: the of the vehicle and the amortization of the loan. is the rate at which the value of car declines; amortization refers to the you make on a loan. At the beginning of loan, the value of your car depreciate at a faster rate your interest payments So, after a year or two, you may owe on the car than you could get if you sold it. For if you buy a car for $20,000, after two years it may be only $11,500 due to depreciation but you owe $14,000. That means you are upside down on your by $2,500. Why is this bad? if your car gets totaled in an (we hope not!), the insurance would only pay you $11,500, and you have to make up the $2,500 that you owe the bank.

Bad Credit Beware

The dealer have the best advertised but remember, they are only the You may be able to get a better rate by around. If you finance through the make sure you know annual percentage rate is and what size loan you for. If your credit is find other loan .


Watch out for financing gimmicks: you see a dealer advertise 0% financing, usually means that in to qualify for that you must excellent credit and slap a large down payment 25% of the cost of the car. 0% financing applies to short-term leases, so if you want to lease, or if you want to out your payments, you could be

Three Places to Finance

are three places to obtain

Online: There are several that can provide your report score and there are out there that will pre-approve you for a loan .

Your or Credit Union: Visit bank or credit union and the rates that you qualify

The Dealer: The dealer has many sources. Each source their rates to the dealer, in turn may add additional percentage If you don’t know what rate you qualify for, dealers may add thousands of extra to your monthly payments. By what rates you qualify for you can confusion at the dealership.

Reverse Calculator

Instead of finding the price of a car before you set your our reverse payment calculator all of the work for you by letting you input desired monthly payments, term and down payment This way you can get a list of cars you can afford by using your payments. I know it’s but resist the urge to spend than you can afford. There are of new cars out there that can fit needs and are well-within your so don’t get greedy!

TIP: roll an upside down on a trade-in into a new car purchase. Because you will immediately be down in your new loan, as I mentioned before, is a very place to be. If you exercise patience, the of depreciation will level out and amortization will catch up and the value of the car, leaving you equity.

BOTTOM LINE: Cash is the line. The best way to save on a new car is to have as much cash as at the point of purchase. The more you can pony up front will down your monthly as well as the interest you will pay the duration of your loan/lease. is the name of the game. If you save cash for a big down payment, you be saving money in interest, having lower monthly


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