All posts tagged car financing

Auto Financing: 4 Plans to Help You Get into a Car Fast

auto financing

Before making the commitment to a car loan, take time to plan a few important steps. To get into a car quick and painlessly, it helps to maximize creditworthiness, budget accordingly, realistically consider your income, and obtain a preapproval.

Maximize Your Creditworthiness

To have the most auto financing options, check your credit beforehand. Knowing your score helps you know what to expect ahead of time. Also, it gives you the opportunity to improve your score. Always look for errors on your report. If account balances are inaccurately reported or if $0 balance on accounts are not reflected, you may find yourself paying more in interest or being denied. Pay particular attention to previous auto loan reporting. If possible, pay down credit cards or pay them off completely. Credit scores are sensitive to the percentage of your total available credit you have used. The lower the better.

Budget Accordingly

Before stepping onto a car lot, know what you can afford. Often, people make the mistake of just figuring the maximum they can squeeze out of their monthly income, but this leaves them at a disadvantage. It is important to only spend as much as you can comfortably afford, while still having enough room in your budget to meet other financial goals. Prior to purchasing a vehicle, make sure you have budgeted for other vehicle-related expenses, including insurance, gas, maintenance, and repairs. These amounts differ substantially with different vehicles, so the monthly payment should never be your only consideration.

Consider Your Income

A good rule of thumb is to spend no more than 10 percent of your after-tax income on a car payment. For example, if your take home pay is $2,500 per month, than a car payment of $250 or under keeps you in good financial shape. Some companies, like Bay Ridge Nissan, know that you also have to add insurance, gas, maintenance, and repairs to this figure. When you calculate the total costs, it usually becomes clear why the 10 percent rule makes sense.

Get Pre-Approved

This not only saves you time at the dealership, it saves you money as well. Pre-approval prevents you from having to make a quick financing decision. You can take the time to consider multiple options. They also give you negotiating leverage. From the dealership’s standpoint, you are not only a sure thing, but you can keep the negotiation focused on the price of the car instead of the monthly payment.

Armed with your preapproval and prepared with a budget, getting into a car fast is no problem. The balance of the negotiation is on your side when you know what you want to pay and stay within your parameters.

Auto Sale Hunter: How to Snag a Killer Deal at the Dealership

Heading to the dealership to purchase a vehicle is an exciting, but potentially stressful, situation. You’re excited to get a new car and see the options you have, but you don’t want to overpay for the car you get. Preparing for your trip to the dealership before you go can decrease your stress level and make the purchasing process much more enjoyable.

1. Get Financing First

You’ll have more bargaining power if you go into a dealership with financing for the vehicle secured already. This makes the process faster and you’ll typically secure a lower interest rate with your local bank or credit union unless you have excellent credit and qualify for a special promotion through the dealership. It also gives you one less thing to worry about during your car shopping experience.

2. Know Your Price

Do research before you leave and have a price in mind of how much you can afford for what you want. Waiting for the salesman to offer you a deal may waste your time. Compare prices across multiple websites and dealerships. Walk in with these prices and let them know that you have done your own research and want to get the best deal they can offer in comparison to other local dealerships.

3. Know How Long the Car Has Been Sitting

Dealerships are eager to get rid of old inventory that takes up space on the lot because it costs them money for every month that the car doesn’t sell. Budget-conscious individuals can score a better deal on something that isn’t as new simply because it hasn’t been scooped up by another buyer yet.

New arrivals might be more appealing to your eye, but something sitting for six months can save you a few hundred or thousand dollars during the life of the loan.

4. Don’t Focus on the Monthly Payment

A low monthly payment can seem more appealing, but you may pay significantly more in interest costs. Try to get a loan for no longer than 48 months or four years if possible. Some dealerships might try to sell you something that is out of your budget but is affordable under a five or six-year loan term. Avoid focusing on immediate gratification and impulse.

5. Know Your Trade-in Value

Don’t bring up your trade-in to the salesman until after the price has been established. It complicates the negotiation process. Research how much your car is worth before going to the dealership by looking its condition up.

Factor in the aesthetic condition, mileage and other applicable factors that can increase how much your trade-in is worth. After you’ve worked with your salesman to get the car you want and have a price set in stone, bring up your trade-in and factor that into your overall costs to get the best deal.

6. Be Friendly

Know that the salesman is not your enemy and if you work together, you’ll be able to get a deal that makes you both happy. When visiting a St. George Hyundai dealership or one in your particular locale, communicate your needs to the salesman because they want to sell you the car and you want to drive away with something you’re happy with. Hostility will only frustrate you both and create a negative experience.

Purchasing your new car is an exciting event that is even more enjoyable if you go into the dealership with confidence and knowledge about the process you’re heading into. Look at the overall picture and finish the process knowing that you got a vehicle that meets your needs on terms that you are content with.