Financing Your Car

by Lee Wyatt
(last updated May 27, 2010)

Probably one of the single most difficult, or stress inducing aspects of getting a new (or even new for you) car is financing. Financing a car can be an extremely nerve wracking experience for almost anyone. There seems to be so many different aspects to getting a car financed that no one really knows how to go about and do it on their own any more.

Typically, what a majority of people seem to do is go to a car dealer, cross their fingers, and hope that the in-house financing that the dealer uses is going to approve them. There is a better way to finance your car, one that allows you to be in control of your own credit destiny, which is also going to ensure that you are more likely to get the car that you want.

  • Credit Rating. Needless to say, your credit rating is going to play a huge role in not just what type of car you are going to be able to purchase, but whether you can even purchase one at all. By law, a person is allowed to get a free copy of their credit report each year, so if you have not done this yet then you should get a copy prior to purchasing any car. This is going to enable you to operate on the same page as lenders, and help save you time.
  • Vehicle Type. The type of vehicle that you are trying to purchase is going to play a role in what type or level of financing you are going to qualify for. Prior to purchasing, or applying for financing, do some homework on the different vehicle types that are available. Decide on which one that you want, and research what the blue book new value and resale value is for each.
  • Down Payment. The size of the down payment that you are able to make is going to dramatically affect your financing. If you are able to put between 25% and 50% of the total purchase price down, you are more likely to get the financing you want, not to mention you are going to have lower car payments.
  • Lender. There are different types of lenders that you can go with. Many people go with the financial arms of the car dealerships they are dealing with, but you can also utilize private banks and credit unions and even private individuals. Prior to signing on the dotted line, shop around and see what you can find.
  • Loan Length. Length of a loan is going to play a larger role than you think. Often a car dealer is going to try and get you to sign for a loan that takes as long as possible to repay. Often this is going to be presented as a service towards you to help lower the cost of the monthly payments, but what it is really doing is making money for the bank or financial institution through the interest rates. The lower the length then the higher the payments, but the quicker you get the loan repaid.

Author Bio

Lee Wyatt

Contributor of numerous Tips.Net articles, Lee Wyatt is quickly becoming a regular "Jack of all trades." He is currently an independent contractor specializing in writing and editing. Contact him today for all of your writing and editing needs! Click here to contact. ...

MORE FROM LEE

Types of Locks

For some reason, when most people pick out the doors that they will use for their home they over look one major aspect, the ...

Discover More

Streak Free Granite Countertops

Granite is among one of the most popular materials for countertops in today's homes. Part of the reason is that these ...

Discover More

Spot Cleaning Leather Sofas

Leather sofas, chairs, and other furniture have become increasingly popular over the years. In fact, you can't really go into ...

Discover More
MORE CAR TIPS

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

Emergency Radiator Repairs

Have you ever been driving down the road, and all of a sudden your engine temperature spikes? When that happens, chances are ...

Discover More

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

Comments for this tip:

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 8 - 1?

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

Links and Sharing
Share