Buying a car requires you to make the right decisions. There are many options buying it outright or buying it on finance. In fact, buying a car is the second most expensive asset after your house. So, it is important to select the best way to buy a car. Don’t rush into making decisions because they’ll cost you in the long run. Instead, take your time and make sure you got the right decision. Below are three ways to finance your car without losing much.
1) Opting for a Shorter Loan and a Cheaper Car
Car dealers are very smart when it comes to persuading buyers to purchase a car. They will use all techniques to convince you into buying a car; not just a car, but an expensive car that will make you have to repay the car loan for a longer period of time.
Some car dealers will try to lure you with low monthly payments. Don’t accept that kind of deal because their main aim is to generate more interest from you. Instead, choose on a plan that will see you repay your car loan after a short time.
By opting for a shorter loan, you will be able to save more money on interest they would have charged you if you opted for the low monthly payment. Doing this will not only help you cut on cost, but also build equity in your car as fast as possible. It is therefore better to be very careful with the car dealers. Don’t let them fool you with their offers.
2) Don’t Finance a Car with a Bad-Credit Loan
You don’t have to lie low to car dealers simply because you have a bad credit score. Instead, find ways in which you can get approved before you start shopping around. Some companies always offer Auto loan. Be sure to check.
You need to first check your credit report to ascertain that everything is okay. There are sites where you can check your credit report for free. Just search the sites on Google and confirm that everything is okay.
Once you are certain with the nature of your credit report, you can go ahead and negotiate with the car dealer on fair grounds. It will prevent the car dealer from exploiting you or taking advantage of the bad credit score. So, go ahead and be sure your credit report is excellent before you start shopping around for the best car.
3) Finance Your Car with a Credit-Union Car Loan
Credit unions are different from banks in that they are member-owned, unlike the banks that are mandated to make profit for their shareholders. Always ensure you check your car loan eligibility before making any decision.
Therefore, you can be guaranteed that a credit union car loan will provide you with lower rates as compared to the banks. The only challenge is that you first have to be a member.
Some credit card unions have strict rules. For example, Wings Financial Union only accepts members who live in Saint Paul or Tacoma. Though some credit unions can allow you to qualify for their membership, regardless of your city or your place of work. You should be able to find that better.
Final Thoughts
Once you have the best possible car loan, make sure you are not exploited in any way by the car dealers; get the best deal that will not let you regret later. But make sure you follow the guidelines above to avoid any poor deal.
