SAVE MONEY ON CAR FINANCING
You need to know the details of your new car financing before you buy a new car. Better yet, know the details of your new car financing before you go to the car dealer. Details you should know include: - How much you intend to pay for the car. (See
Purchase Price And Trade In
)
It’s worth repeating that you should get these financing details, and more, BEFORE you go to the dealer and actually sit in that hot new beauty that makes your heart go pitter-patter. _________________________________________________________________ _________________________________________________________________
WHAT DETERMINES THE INTEREST RATE YOU WILL PAY? The three primary factors affecting car financing rates are:
_________________________________________________________________ INTEREST RATES Interest rates fluctuate from year to year, sometimes month to month. If you need to borrow money to make a purchase, there is little you can do about prevailing interest rates. And nobody can accurately predict what interest rates will be next year. _________________________________________________________________ YOUR CREDIT RATING Another factor that has a big influence on financing interest rates is your personal credit rating. Equifax monitors credit ratings and can get a free credit report into your hands quickly by clicking Get Your Equifax Credit Report Now!
Equifax also has excellent credit management resources, identity theft protection, and a free interest rate finder to help you shop for the best financing terms. _________________________________________________________________ WHERE TO FIND GOOD CAR FINANCING TERMS Where you get a loan can also make a huge difference in car financing costs. Often, online finance companies will offer new car loans with better financing interest rates than car dealers. But DO check with your car dealer before you sign any papers with anybody. Manufacturers often have lucrative new offers available through their in-house finance companies. Some manufacturer’s new car financing deals are sometimes as low as 0% for several years. The key is to shop for favorable financing terms just like you shop for better prices on anything. Shopping for favorable financing terms is easier than ever thanks to the power of the Internet. As you shop you’ll want to use a car financing calculator like the free calculator in the "Research Tools" drop down menu at My Auto Loan
This nifty calculator lets you plug in the amount you expect to finance, the interest rate, and the duration of the loan. It calculates the monthly payment schedule and the total amount paid for the loan. If you want to check with your local bank or credit union for new car loans and financing interest rates, you can often do so online. You can usually submit a loan application and find out your interest rate, closing costs, and total loan costs right from your desktop. You can also find out what corporate financing offers are available on just about any new car. Most manufacturers will show current buyer incentives and car financing options on their websites. _________________________________________________________________ A search engine makes finding finance offers a snap.
Enter your local bank to find out what offers they show. Once you have that data in hand you can easily compare it to the online car financing companies shown on this page. _________________________________________________________________ One advantage of getting pre approved online car financing set up is that it allows you to walk into a dealership with the ability to write a check for a car. That forces the negotiation to be limited to purchase price and trade in, which is an advantage for you, the buyer. (See Dealing With The Dealer .) Some online financing companies allow you to take a check (after getting approved credit) without obligation unless you actually sign the check. If a dealer does have better car financing available than you have in hand, then you can accept the dealer’s terms and dispose of the check. Just be sure that you, indeed, are under no obligation to use the check you bring to the dealer. And be sure that the dealer’s financing is, indeed, better than the one you have in hand. _________________________________________________________________
SHOULD YOU TAKE A LOW INTEREST LOAN, OR A REBATE? The low and no interest financing offers from car manufacturers are perfectly legitimate sales incentives. They often offer a choice between either a rebate or low interest financing. It’s up to you to figure if it’s worth taking your cash out of savings or floating a loan with another company to make the numbers add up in your favor. The Citi Financial Rebate Vs Low Interest Calculator can help you decide your best option when you’re offered low or no interest new car financing terms. _________________________________________________________________
SHOULD YOU USE HOME EQUITY TO FINANCE A CAR PURCHASE? [The discussion below refers to tax laws in The United States of America. If you live outside the United States of America you should consult a tax advisor in your country. And if you live inside the United States of America, you should also consult a tax advisor about the information presented here.] Two often asked questions about car financing are: Can I deduct interest paid on car loans from my income taxes? Can I get a home equity loan to finance a car, and deduct the interest from my income taxes? Interest paid on a personal transportation (non business use) loan in The United States is NOT tax deductible. However, SOME interest paid on CERTAIN home equity loans in The United States MAY be deductible. The rules are a bit complicated; after all, this is the Internal Revenue Service of the United States we’re talking about. BEFORE you decide to secure a home equity loan to buy a car do the following: Read the FDIC Consumer Information On Home Equity Loans . Read the IRS Home Mortgage Interest Deduction Rules . Consult a competent Certified Public Account or Tax Attorney and find out how the rules and restrictions regarding tax deductibility of home equity loans apply to your particular situation. When considering financing options the ELoan Home Loan vs Car Loan Calculator can help you decide if a home equity loan works to your financial advantage. If, after properly researching the matter, you’ve decided that you can benefit from a home equity loan, the links below can help you shop and compare loans to get the most favorable terms.
Citifinancial.com
MORE IMPORTANT CAR FINANCING DETAILS
When comparing financing, be sure you total the charges. Some lenders advertise no upfront closing costs or other finance charges, but charge higher interest rates. Others lenders advertise lower interest rates but have additional closing costs and finance charges. You must add up all of the charges from each lender to get accurate cost data to compare. There are a number of pitfalls that everyone should be aware of, and avoid. Edmund’s has an excellent discussion of Financing Pitfalls to Avoid
The Edmund’s Finance
Buying A Car For Dummies Last but not least, read and understand every word of the financing contract before you sign. Always watch for hidden charges. When in doubt, consult your attorney. A hundred or so spent on an attorney might save you thousands. _________________________________________________________________ _________________________________________________________________
Return To Money Saving Car Care
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is another excellent resource on car finances. In addition to three informative chapters on finances, this detailed reference book has loads of money saving information including negotiating with dealers, avoiding lemons, auto insurance, and much more.
