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Car
Loans
Financing
an auto
Seven out of 10 new cars are financed, and you can
also finance a used car. But to do it right you must
be prepared before -- and after -- you reach the car
lot!
You can get an car loan from a bank, credit union or
other financial institutions. You can have these loans
approved before you ever hit the showroom (a major
plus in most deals). These sources of financing will
usually offer the lowest rates you'll find, and credit
unions are generally lower than banks.
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You
can, of course, pay cash.
You can also get
financing from the dealer or auto manufacturer.
A general rule of thumb says that dealer/manufacturer
financing will cost you more, but it isn't written in
stone. There will be occasions where a dealer will
actually give you the best deal. Unfortunately, those
occasions are not predictable (despite endless
"must sell" and "no money down"
advertising by dealers) and the only way to be sure is
by comparison shopping.
Keep leasing in mind even if you think you don't want
to do it. It may be an option you like more as you go
along.
One
other choice is a home equity loan. You'll get a good
interest rate and the payments will be tax deductible.
But be sure such a loan won't leave you in any danger
of losing your house -- after all, it's just a car. If
financing is a stretch, your family may loan you money
or co-sign for a loan. If they do, make sure ALL
parties are fully aware of every detail of the loan
and the possibilities should circumstances change or
things go wrong.
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More Information Click Here
It's all in the
numbers
Interest rates on new
cars are lower than on used vehicles. And, in general,
new cars can be financed over longer terms than used
ones. This equation can make a new car cheaper than a
used one in many cases.
Not all the numbers in your deal will be set in stone
before you buy, especially if you go with
dealer/manufacturer financing. The interest rate you
pay can vary, and so can the down payment and other
details like the value of your trade in or the length
of the loan you take. You have to decide. Don't let
one number dominate you. For example, a really low
down payment is not by itself a guarantee of a good
deal. You need to consider all the numbers together to
know what sort of deal you're getting.
Dealers will often paint a low price on the
windshield, then make their money back when they
finance the car. Sometimes, dealers offer very low
interest rates for specific cars or models, but then
they won't come down a penny on the price. Or to
qualify for that rate you'll have to pony up a large
down payment. You might find it a better deal to pay
higher financing on a low-price car or you may go for
a vehicle with a low down payment.
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More Information Click Here
Bottom line --
know your numbers. Be sure, every step of the way,
that you know just how much you are paying, when, how
and what for! No exceptions!
In simple terms, you will pay a lower monthly amount
the longer the term of the loan -- but in the end you
will pay out more in total for the vehicle this way.
The longer the loan, the longer it takes you to build
up equity -- that is, for the car to be worth more
than you owe on it. So with a long loan it will
usually be some time before you can re-sell the
vehicle and clear the loan.
Sign nothing unless you understand what it is, make
sure every "i" is dotted and every "t"
is crossed and there are no blanks left. Make sure any
changes to the basic contracts are signed or initialed
by both parties.
If you get embarrassed by a feeling of asking too
much, imagine how much fun it will be to tell a dealer
later that he has got it wrong and owes you something.
He will haul out that contract you caved on.
When you sign the contract make sure the dealership
has an authorized representative sign -- you don't
want to find out later that the nice salesperson was
not empowered to sign on behalf of the dealership.
And always make sure you have copies of everything you
signed.
How refinancing car
loan applications can put money in your pocket
Do you want the lowest
interest rates on your loan, but feel locked into your
high payments? With a refinancing car loan you can
gain the freedom to seek a reduced loan rate. Also, a
refinancing car loan is a simple way to improve your
debt-to-income ratio.
A refinancing car loan
can occur by replacing your current loan with a lower
interest rate loan over the same period of time
remaining on your loan. You can create a new loan term
which will help you keep your payments down by
extending the term on your loan. Or you can reduce the
length of your loan by reducing the total interest
expense.
A refinancing car loan
may be for you if you; want to take advantage of lower
interest rates and lower monthly loan payments; are
locked into an auto lease and want to convert it to a
standard loan; want to cash in on the equity of your
current vehicle; want to improve your credit rating;
or are looking to purchase a new home and want to
qualify for a better mortgage.
A refinancing car loan
can save you money on your current lease or loan
obligation by reducing your current loan rate. Simply,
supply your lender with your credit information, and
they will call you back with your approval and will go
over the rates and terms.
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More Information Click Here
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