New Car Loan Financing
If you're ready for a new car, and you haven't thought about the best way to save money on your new car loan financing, here are some tips to get the best possible rate for your loan. As you do the research for your new car, be sure to consider all the features you may want to include. As you make choices, you may also want to consider such things as the cost of insurance, licensing and other fees. Of course, you'll want to take the long view of the cost of ownership as well.
Cars which keep their value longer will save you money over time and you will be in less danger of a situation where you are upside down in the loan.
Once you've selected the automobile make and model which you want, you should visit some of the dealers both local and on the internet to determine the amount that you can expect to pay for the vehicle.
Next, you should begin some serious negotiations with the dealership.
Do some what if scenarios such as 'what if I traded in my existing automobile?' or 'What if I sold my vehicle myself?' You should also explore the rates the dealership financed loan would cost. In short, find out what the best possible deal that each dealership is willing to make.
One of the things which can make a sizable difference in the amount of the new car loan is the amount of down payment. Although 5% down loans are granted every day, they are really a poor choice if you want to avoid the negative equity trap.
You should strive to make the largest possible down payment. If this is better accomplished by a trade in of your existing vehicle, then by all means do so, but it is more likely that you'll find the best deal exists when you sell your existing car and apply the cash as part of the down payment. Try to make a down payment of at least 20%.
If you make a sizable down payment on the automobile, demand to get a better interest rate.
When you actually are to the point of selecting a lender, you have several choices.
Of course, you can look online where you are likely to find the best deals. Applying for a loan online is generally a fairly routine process nowadays and you will often receive an answer back in a relatively short amount of time.
Again, when you negotiate for loan terms and rates, you should push for the shortest possible terms and lower rates. You will save hundreds and perhaps even thousands of dollars by paying less interest.
If you aren't satisfied with the online deals, you can always check with a local credit union where you will often find very good rates. Other people choose to use a home equity loan which has the advantage of lower interest rates and a potential for tax savings as well.
Finally a bank with whom you have a relationship will often be amenable to loaning on a new car.
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