When buying a new car, it’s important to take every measure possible so as to ensure that you do not spend unnecessarily large amounts of money. This makes the process of financing a car daunting and tricky. Here are tips that will enable you to finance your next car easily.
Know your credit score
Finding out your current credit rating score is a very important task before you seek finance for your next car. The financier considers buyers credit worthiness while approving any kind of loan. It’s worth noting that unlike mortgages, you can get a car loan even when you have pretty bad credit. This is because it’s relatively easy for banks to repossess the car if you fail to pay. Mostly dealership advertise for good interest rates on new cars but they often leave in the fine prints that the rates are only available to buyers with the best credit scores. If you have bad credit, consider using an edmonton bad credit car loan company.
Find out how much you can afford for a new car
Whether you are planning to acquire a new or used car, it’s always important to consider the level of dollar commitment you can take on. Put into consideration other factors such as the initial down payment and the individual monthly payment in addition to other essentials included in your overall household budget. Compare that with your monthly or annual income, if it’s going to strain your financial capability, go for something that you will comfortably pay with minimal financial constraints.
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Pick a car carefully
After deciding on how much you can afford for your new car, do some research on different car models. The internet is a good source of information as you can lean a lot about a model even without seeing it physically. The model of the car you pick will enable you to convince financing institutions to give you certain loan limits. It will also enable you to understand if there are any extra costs you might incur in making the car perfect for your traveling needs.
Consider all hidden costs involved in the purchase.
Purchasing a new car comes with other related expenses beside the original cost of the car. Annual licensing fees, insurance coverage, scheduled maintenance and projected fuel cost can impact significantly on the outcome of your auto financing decision making process. Some models also come with add-on products that are unnecessary and usually overpriced.
Determine the length of your auto loan period
Paying for auto loans for a short period of time or a long period of time comes with different benefit and detriments. Extended length of a loan lower monthly outlays but the total financing cost will be greater over time. Shorter payment times have higher monthly outlays but the total financing cost is relatively lower. Some manufacturers offer buyers special low cost or zero interest loans that are payable for a period mostly not more that 36 months. These loans have higher payment but less out of pocket cost over time.
Explore for the best source of funding
Check with different dealerships and banks to ascertain their rates on various auto loans. Understand their terms and conditions including repayment options and terms of loan. This will not only enable you to get the best rates and save you future embarrassment when your car is repossessed but will also put you in a far stronger overall position when it comes to negotiating the price of the vehicle. Be sure to have information on any manufacture specific subsidized promotional rates.
Negotiate for better rates
Despite many auto loans offered by banks and credit unions, eight out of 10 cars buyers finance their cars through a car dealer. If you find yourself behind closed doors in the finance or insurance department of a car dealer, be ready to negotiate for the lowest interest rates without feeling intimidated. This will enable you to save a lot of money when you get low interest rates.