Previously, getting a loan from a credit union, bank or other financial institution was the only way to get a loan. Now you can compare loan prices and find lenders online over the Internet. This may not always be the best deal though. Make sure to do your homework when searching for a loan. Use caution before signing paperwork. You should also know that your current financial institution may give you incentives or a good loan rate since you already have an account with them.
Wherever you obtain your loan, it will comprise of the principal which is the amount you borrow, as well as the interest rate and loan term. The term is the length of time you will have to pay the loan. Sometimes, to get a lower monthly payment, you will agree to make payments over a longer period of time. Doing so will make the final cost of the car much more.
Lots of people take out loans for a new car that last as long as 60 months. Before you do this, calculate how much this will cost you in the end. The lower payment might seem attractive, but it will cost you more in the long run. Sometimes you will owe more on your current car than it is worth. This is called being ‘upside down.’ Try to avoid this, as it will also cost you more in the end.
Research different websites for tools you can use to calculate different loans and monthly payments online. This will help you avoid getting the wrong loan. It could also save you several hundred dollars. Some good sites you can use are bankrate.com and eloan.com. Make sure any site you use guarantees privacy before you enter your personal information. You should research all of your loan options carefully while researching your new car purchase.
Another thing to think about is the auto warranty offered on a new car. You can negotiate the stipulations of the warranty with the dealer. You may want to purchase an extended auto warranty.
Published in by CARCHEX on November 13, 2014