Car Financing – Things to Remember
Buying a new car is a fun and exciting thing. Here are a few things to remember when going to make that big purchase.
When buying a new car there are three ways of financing it.One is by buying the car outright with cash. Meaning one time payment. Not too many people have the means to do so. Really I wish I could, no car payment every month that would be awesome. Doing it this way means there will be no credit check and no budgeting for monthly payments. Even with all this in mind, people prefer to use monthly payments instead of paying in full. Reasons for this would be they don’t want to drain their savings on a new car when they could use it to invest in other things like down payment on a house or in stocks and bonds.
So, let’s cover the most popular way to buy a new car, getting a loan. There are two ways of doing this. One would be going through a bank like your personal bank asking for money.This way is good if you do it before you go to purchase a car, it gives you an idea of what they are willing to loan you so you can stay in your price range when looking at cars. I like this way the best. The other way is going straight to the car dealer and using their financial instutions to get you a loan. All you have to do is go in pick a car and fill out the paperwork, the dealership will do the rest. Both ways are just fine, keep in mind they will be running a credit report, checking you score, and needing references. Also remember to pay close attention they can do different things to keep your monthly payments low. One of which is adding more to your down payment. Another is giving you more time to pay-off the loan. Just remember the more years you agree to the more interest you will be paying making you pay more in the long run.
The third and final way would be to do a lease contract. This isn’t a bad idea if you want a new car every couple years. Basically you fill out a lease application,you still pay monthly payments and return it at the end of the lease or purchase it at face value. When leasing they add charges for going over a certain mileage or how bad of condition the car is in when you return it. If you go this route I would recommend a lot of scotchguard.