If you are planning to buy a car, whether it’s brand new or used, you are given two options – pay in cash or have it financed. The latter is the more popular option especially to those with a tight budget and could not shell out a huge sum of money to purchase the vehicle in cash. There is no problem with financing a car as long as you know how to do it the smart way. Interested to learn auto-financing tips? You have come to the right place. Here are some tips that can help you out.
Understand Your Credit Score
Most car dealers offer auto-financing. This is their way to help their customers get the car that they need and want, even if they are on a tight budget. But before doing this, make sure that you check and keep track of your credit report and score. Usually, you can get a car even if you have bad credit. However, you might need to pay a lot more. Just remember that the lower your credit score is, the better it is to shop around for the best rate.
Get Financing Quotes Before You Decide
Before you decide on a vehicle at used cars in plantation, get a quote online. If you have a good credit score, it will not be difficult for you to find a good offer. But if it not as stellar as the others, don’t worry, you can still get a car. You can try online lenders. This way, you can get a quote online before you even decide to give it a go.
Keep The Term Short
Think of this: shorter loan terms have lower interest rates. However, they also have higher monthly payments. But this is definitely what you would want to get. The longer it is for you to repay the loan, the more interest you will pay. Aside from that, other banks will also charge a higher interest if you take longer loans and increase your cost of credit.
Have a 20% Downpayment
Aside from considering a short loan term, you can also put more money down to avoid owning more money for the car. You might not know this but many dealerships do not require their buyers with a good credit standing to make a downpayment. Might sound like a good deal but remember, you will find yourself with a bigger amount to pay every month. It is a risky move. So why not give at least a 20% downpayment to avoid owing the bank more money?
Take Care Of Payables In Cash
For taxes, fees, and other things that you need to take care of, pay them in cash. Avoid financing the miscellaneous expenses that you need to take care of when purchasing your cash. These ‘extras’ are registration fees, sales taxes, documentation fees, and a lot more. Dealers might be happy to get them financed, but don’t do it. Pay them in cash instead.
If you do not have the cash to pay the car in full, you can have it financed. However, take note that you should do it the smartest way possible. Do not just follow what the dealer suggests. Know where you stand and learn ways to lessen your burden later on.