Next to a mortgage, a car is the most common big ticket item that most people will finance in their lifetime. Having a good understanding of auto finance terms and conditions – before you step foot on the car lot – can save you hundreds of dollars on your next vehicle. A lack of general auto finance knowledge might mean that you get hoodwinked.
The Basics:
For most of us, buying a car with cash is not an option. Vehicle retailers know this, and so they make financing as simple and quick a process as they can. Even most new vehicle ads show the monthly cost of financing along with the purchase price. Sometimes only the auto finance costs are advertised, we live in a credit-oriented world.
Financing terms are so various, and possibly confusing, that the consumer might feel he needs an MBA just to understand a newspaper ad. The proof is in the ten to fifteen lines of fine print that accompany each of these ads. So how can you know that you are getting a good deal?
To figure out the price you are actually paying, not just your monthly payment, you need to know two basics; interest rate and amortization.
Interest Rate
Getting a good deal on financing your vehicle basically means that you are getting a good interest rate. The interest rate offered to you will be primarily based on your credit score. People with good scores get the best interest rates available.
So how can you get the best rate? Shop around. The good people working at your local car lot will be more than willing to assist you in finding financing for your car, but they might not be able to offer you the best rate. They get paid to sell cars, and car loans. Making auto finance look attractive is their job. Breaking down loans into bi-weekly and weekly payments makes them appear cheap and satisfies the dealers objectives.
If you are in the market for a new car, go to your bank first. They know you and your history. Find out what rates they are offering before you start shopping. Having a price point (for your interest rate) in mind before hitting the lot will give you a leg up in negotiations. If they cant match or beat your bank then get the loan through your bank. This might be more time consuming, but its worth it if it will save you money.
Amortization
Along with chopping your payment into a weekly schedule, salesmen can make your vehicle seem cheaper by offering a long amortization period. When the loan is spread out over a longer time period, your payments are smaller.
Auto financing today can commonly be spread out over 84 or 96 months (that’s seven or eight years). In this case, the amount you owe on your vehicle will always be more than its value.
By having an idea of auto finance rates and terms before you start the negotiation process, you can put yourself in a position to get the most out of your financing agent.
Auto Finance Tips
Auto finance reality check: If you don’t take basic precautions you could end up spending hundreds, or even thousands, of dollars on auto financing costs that could be easily avoided.
Our internal research indicates that most consumers find the auto finance process to be more cumbersome and confusing than the process of purchasing a car. Endless lines of legalese, high pressure sales tactics, short sign-up deadlines, and other insider strategies have given auto financing a bad rep over the past decade or so.
Fortunately, during the past several years car prices have continued to plummet and so have overall auto financing costs. Despite the consumer-driven shift, tens of thousands of customers still do not approach their auto finance needs in a strategic manner. The truth is that some basic precautions could save you a lot of money.
Here are some auto financing tips that are designed to save you money:
Rule #1 of auto financing: Choose the right lender and your auto finance costs will go down
Choosing the right auto finance company is one of the biggest money-saving factors. Unfortunately, this simple parameter is easily overlooked during the auto financing process and the end result is that consumers end up paying dearly in financing costs.
The truth is that if you spend just a little time researching an auto finance company, the time investment will repay itself many times over in long-term savings.
Solution: We, at NationalLoans.com, have done all the ground work for you and have assembled a robust network of thousands of auto finance companies. Complete our simple online application and get connected with the best auto financing companies in the market.
Rule #2: Your car
Did you know auto financing rates are deeply influenced by the car you purchase? Newer cars are generally the ones that win over on interest rate savings in comparison to older models. So, if your choice is between a new and a used car and auto financing costs can save you in the long run, you know which one to choose.
Rule #3: Fix your credit
At NationalLoans.com, we thrive on helping our customers win the best auto financing deals. Take advantage of our exclusive network of lenders and save a bunch on auto finance costs. Complete our short — really short — auto finance application and receive free quotes. Pick a lender and drive away in your brand new car.
Get an Auto Loan Fast!
Don’t take our word, tens of thousands of customers have benefited from our low — seriously low — auto finance rates and have achieved the goal of buying a new car at insanely low auto finance rates.
