By Michael Benifez
Set your budget before setting your sights on the car of your dreams. Ask yourself: How will it be paid? Who will help pay for it? What is total price of the car I want? How long will it take to me pay off the car?
People buy cars by cashing out the down payment and paying the balance installment. Some people pay for their new car directly, after disciplined saving for that purpose. If you choose to finance your car, consider that you may end up paying thousands of dollars in interest than can take years to pay off.
What's the Budget?
Identify your budget limitations so you can begin shopping around for financing, if that’s the best option for you. Read the fine print on everything before you sign papers for new loans. Some credit unions and local banks offer interest rates as low as 1.9 percent, but that rate only holds for a certain amount of months.
These interest rates can increase without prior notice – to the detriment of anyone on a fixed income.
Credit union membership can save you the trouble of spending a whole day in a lender's office. Processing loan applications is often quicker, and immediate loans can go as high as $25,000.
Doing Research
Research thoroughly before taking on a car loan. Car dealers often issue unreasonable interest, so it’s important to consider a few things when you are looking to finance a new car. Decide about the maximum amount you are willing to spend, and stick to your decision like glue.
You may be approved for more credit than you can actually afford.
Don’t go over your maximum just because you can. Don’t decide to buy the car of your dreams just because some lender is willing to put up the dough. Consider your monthly regular expenditures.
A monthly car payment should never impede payment of fixed monthly household expenses in the household. If the buying the car of your choice will jeopardize your ability to pay all your bills on time, don’t do it. Find a car that fits both your lifestyle and your budget.
Many people wonder if it’s important to change cars every two to four years. If you believe it is, consider cars offered on a lease. Certain car dealers and lenders offer leases for cars. You pay a monthly amount, and return the car after a set number of years. No money is refunded to you, and there is an allotted amount of mileage you can drive without additional charges. Drive distance is negotiable, however. If you’re not interested in frequently changing cars, leasing is probably not the best option for you.
Safe Loans?
It is safest to get a loan from a credit union or a financial institution instead of a local car salesman. Car salesmen are notorious for blurring the lines between what you can qualify for, what you can truly afford, and what you are willing to pay. Those three things can vary significantly. Instead of going straight to a dealership, get information from someone who can be trusted -- an expert on auto financing. They can give you beneficial tips regarding your purchase.
Financing either a new or a second hand car should be time consuming. If it isn’t you probably haven’t done your homework and won’t get the best deal. Get the best car for you at the best price for the car. It’s your money that’s at stake here. Do enough research that you are able to make an informed decision.
Michael Benifez shares a few tips on finance and ways to get the most from your budget with real estate landscape projects in Outdoor Landscaping Plans . Find more landscaping tips from the growing plant library at www.Plant-Care.com.
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