Money For A Car: A Guide To Auto Financing
It is very common that nobody wants to stay as a dumb buyer in a car buying deal. You have to be smart in dealing with car otherwise you may end up losing more money. It is a very common scheme among car buyers to get the money first in order to buy a new car.
The term is called “auto financing” and it simply the way to pay for buying a new vehicle. You can borrow some money from auto finance company to own a car, in which you have two options: You can either use the money from the loan to buy the car, or use it for lease.
Most people would have known about this fact, if this isn’t your first time buying a car, salesman or your car dealer will be checking your credit report before starting with the negotiations. But this seems to be not the only way to get your new car. The seller may try to convince you with the deal of offering car fiancé situations in exchange for throwing yourself totally at his mercy. But make sure you are not choosing this path. Let us discuss how auto finance works for different car buyers:
Inflated Interest Rates:
Interest rate varies from one car buyer to other car buyer. This factor is mainly affected by the credit report of the buyer. When the interest rate is getting inflated, then the dealership can make extra profits out of your loan. This is one of the major pitfalls in auto financing.
Independent Auto Financing:
Some car buyers may have an approved auto financing option on hand, you can then proceed with the deal as a “cash buyer” so you have already cash in your hand from the loan which you can use to buy the car from the dealer with that money. Car salesman prefer customers to be “monthly payment” buyers as it makes easier for them to get money properly as well as gain some more money with interest.
Set a Price Range:
Having a budget is the crucial thing which will help you to avoid spending more money for buying car. Since you have other expenses to spend every month, which you will use to spent monthly to pay your car loan. One good tip is to ensure that your monthly car payments and related expenses do not exceed about 20% of your monthly net income.