Buying a car is probably the second most expensive purchase you will ever make, after buying your home. To make sure that you get the best deal when the time comes, consider the car finance tips listed below. It depends where you are financially when it comes to buying a car.
Your credit score plays an important role in determining the interest charged on any car loan you qualify for. This is why you should take the time to find out your current credit score before you start shopping around for a car loan. Use the top three credit score checking services available. The reason for using all three services is that you don’t know which service the lender will use.
You should also get your credit report, from the top three credit reporting services, before you start contacting any lenders.
If you have bad credit you can try a FlexiBuy rent or buy car provider. They don’t do credit checks if you have had some bad marks in the past.
Set A Budget
To ensure that you can actually afford the car you want, throughout the ownership period, it is recommended that you set a budget. Your monthly car budget, for all cars in the household, should be no more than 25 percent of your household’s total income. It is worth noting that this figure includes monthly car payments and all car running costs including insurance and fuel.
Before you decide to buy any vehicle available for sale, be sure to calculate its monthly costs and compare this with the available monthly budget. This way you will be best positioned to make all necessary payments on time.
New Or Used
Another important factor to consider when it comes to finding affordable car finance is the condition of the vehicle i.e. is it new or used. A brand new car will definitely cost more; however, lenders will charge lower interest, and you will also enjoy free maintenance under the manufacturer’s warranty.
On the other hand, used cars have a lower price tag, but cost more as far as car finance interest rates are concerned.
You can also consider choosing pre-owned certified cars, as an alternative to the options mentioned above. These vehicles come with a remainder of the manufacturer’s warranty intact. Additionally, they are cheaper than new cars and have to satisfy strict quality standards.
It is normal for car buyers to take up the financing offered at the dealership. However, it is worth noting that dealerships usually receive a commission on the car loans they sell to customers. This means that they may not have your best interest at heart when recommending their in-house loan products.
Alternatively, you can secure funding from other sources including credit unions and banks. Securing financing from these sources before visiting the dealership gives you a better chance of negotiating friendlier purchase terms; helping you make savings at the end of it all.
Using a rent to own cars plan you do not have to acquire finance but you do have to keep up your weekly rental payments.
Dealerships offer a variety of discounts to their customers. You might find discounts for military personnel, students and members of various credit unions. You should take the time to find out all the discounts offered by the dealer, and then take advantage of all those you qualify for. These are deducted from the price before you start negotiating for an even lower one.
With the above factors in mind, you will have an easier time negotiating for the best car finance terms.