Monday, February 17, 2014

How to Save Money When Choosing a Car Loan

 

Are you looking to buy a new car?  When I passed driver's ed and my written test, my parents bought me a used car to drive back and forth to school.  It wasn't the prettiest car and it wasn't brand new, but at the time it was the perfect "new" car for me!

I didn't get my first brand new car until I was in my early 20's.  I had recently moved and gotten engaged, and my old car was on its last journey.  Making the decision to buy a new car was both exciting and a little scary.  I loved the idea of driving a brand new car, but the added expense of a car payment had me a little worried.  I assumed that car loan interest rates would be out of my comfort zone and my budget.

Here are a few things to look for when purchasing a new car that can help you save money when choosing a car loan:

  • Flexible terms: Put yourself in the driver's seat by finding a car loan that is right for you!
  • No penalty for early payoff Did you know that some companies charge a penalty fee if you pay the loan off early?  Many loans have no penalty for early payment. In fact, many car loans are structured so that you gain an advantage by paying the loan off early. Get rewarded for being responsible!
  • No ongoing account keeping feesAvoid additional fees and costs whenever possible.  This way the amount of your loan is the fixed amount that you signed and agreed upon - nothing more!
  • Fixed payment amount for easy budgeting:  This way there will be no surprises when your monthly bill arrives.  By having a fixed repayment amount, you know what you have to budget for each month.
  • Stay Within Your Budget:  Just because you see your dream car doesn't mean that it's the one you should purchase.  Be sensible and realistic!  What can you afford and still be able to live within your means?

As with any major purchase, shopping around for the best deals is an important first step.  Weigh your options and make the choice that best suits your specific and individual needs.  With affordable rates and no penalty for early payout, you could be cruising down the road in the car of your dreams sooner than you think.

How do you save money when shopping for a new car?

11 comments:

Tammy said...

If we don't have the money saved up for it, we try and find financing at a dealership that's 0% for 36 months (that's how we bought our last car). This time around though when we're ready to replace, we're hoping to not have to take a loan out at all.

Penelope said...

They are surprisingly tricky…our guy tried to scam us and offered us an 8% loan when it turned out we were also eligible for a 3% loan (I have a hard time trusting car salesmen and anyone in that business as a result).

Robin Gagnon said...

Great tips, that seem like they should be common sense, but when you look at shiny new cars it is easy to get dazzled.

Theresa Gould said...

These are great tips and number two? I can't believe they do that.

Anne - Mommy Has to Work said...

no real tips from me...I think I got a good deal on my car. Its 1.9%...

Brandy said...

These are all good points and are things I thought about back when I got my Town & Country last year.

TerriAnn van Gosliga said...

Fantastic tips, especially the one about staying within your budget and keeping a fixed amount. Also, shop around for good APRs!

Liz @ A Nut in a Nutshell said...

It's my least favorite thing to do in life. I dread it so much! I'm going to pay cash for my next vehicle. I'm saving up.

Mike said...

Before shopping for a loan you should always search what deals and offers are available in market and which will suit you. Search over the internet before going for it. Never allow your car dealer to decide your how much worth is your credit. Also you should always look for a car that holds a good value Keep your car to yourself as much as you can.

Toni Patton said...

Great tips. We are in the car market now so we will definitely keep these in mind.

lil_lady_dz said...

Wonderful tips for when looking for a car loan. We are thinking about getting a new car soon. So this post was very helpful.