Financing a Car Purchase

 

"What can I do to lower the price of my car?" That is a question that many people ask, though they never seem to have an answer. What many people may not realize, initially, is that financing plays a huge role in the final cost of your new car. The amount of money that was financed, the length of the loan, and the interest rate all impact the final cost of your car.

All of these things might overwhelm someone who is new to car buying, and it is certainly difficult for even those who have purchased several cars before. Using these tips though, can help anyone get the best possible deal next time they are in the market.

  • Identify Your Needs. The potential buyer needs to understand exactly what they need in a car as opposed to what they want. While it is always nice to be able to get what you want, you only really need to get what you need. The wants are extras that can (and will) drive up the price of the car and therefore increase the amount of money that you need to finance.
  • Know Your Price Range. Knowing your price range prior to car shopping is going to help keep you from impulse buying something you later find you cannot afford. Impulse buying is one of the leading causes to higher financing costs.
  • Do Your Homework. Check the April issues of such magazines as Consumer Reports and Car and Driver. These popular publications issue reports about the new cars coming out that year, examining various categories such as repair rates and issues, depreciation rates, and so on. This information is all needed to be able to make sure you get the best value for the money that you are going to spend. Such information also plays a factor in how much money the lenders are willing to give you at financing time.
  • Make a Larger Down Payment. Large down payments can help immensely because the more money you put down at the time of signing means that the lender is going to be providing less. This results in lower financing costs. This also shows the lender that you are a fairly solvent or thrifty individual, and therefore a "safe" bet for a car loan.

More Car Tips

Understanding a Car's Sticker Price

One of the trickiest aspects of purchasing a new car is trying to figure out the sticker price. While it is true that ...

Discover More

Financing Your Car

One of the most confusing aspects of purchasing any new vehicle is the financing options that tend to come along. Here is ...

Discover More

Is Leasing a Car a Good Deal?

When looking to get a new car, there are typically two choices that most people have. Those choices are to either purchase ...

Discover More
Comments

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is four less than 6?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)


Videos

Subscribe to the Tips.Net channel:

Visit the Tips.Net channel on YouTube