Cars On Finance

Buying cars on finance is something that almost everyone who owns a car will have to do. It can seem a bit overwhelming if you've never had a car purchase financed before. There are so many choices available to you, and so many details that are involved in purchasing cars on finance, that it's easy to just take all your advice from the lender. But there are some cars on finance tips and tricks that can help you get the best deal.

Stick to Your Budget

Decide how large your monthly payment can be and don't go beyond that, no matter how tempted you are. And do not tell the lender or car dealer your maximum budget amount. You're sure to end up with a payment that's exactly your maximum budget in that case. Instead, find a car you're interested in and based on four years to pay it back, figure about how much the payment will be. Then negotiate with the dealer on the best price for that car. Haggle with them until the final cost of the car actually equals the sticker price cost. Then when the amount of the monthly payment is revealed to you, you can make adjustments as necessary.

Get Your Credit Report

Before you go anywhere that offers cars on finance, contact one or all of the major credit reporting agencies (Equifax, Experian, TransUnion and Innovis) and get copies of your credit reports. Going through one of them, pay for your credit score. It can cost as little as $8 to get that agency's score. You'll want to know your number before you go looking at cars on finance. That way, when the dealer comes out and says you can't get their advertised low rate because of your credit score, you're armed with information.

If you have less than perfect credit, it can help you make decisions, too. You may want to wait until you improve your credit score before applying for cars on finance. If you wait until your score is much better, you'll pay on a less interest rate and get a much better deal. You definitely don't want to apply for a car loan and be turned down for it because of your credit score, because the act of them checking your credit and turning you down for the loan can further hurt your credit.

Look into a Bank Loan

While dealerships offer loans for your convenience, (and their profit,) you will probably get much better terms for cars on finance if you go through the bank where you have your checking and other accounts.

Stick with 48 Months

Dealerships will offer you loans up to six years for cars on finance. Unless you have no other less expensive car options and can't afford a higher monthly payment, avoid anything over the standard four years. The longer you pay, the more you pay in interest fees and the worse the investment is. If you get the dealer at the right price for the car you want and the payment is too high, try to negotiate further before extending the loan on a car on finance to save yourself money in the long run.

by carsdirect