currently viewing cars
Print this Page   Email to a Friend   Add to Favorites

How to pay for your vehicle

There are many financing options available

Who hasnít picked up the thick Sunday paper, looked at the brightly colored automobile ads and thought, ďWow, you mean I can buy a new _____ (Civic, Mustang, etc) for $199 a month? I can afford that!Ē

After looking at the fine print, however, it is revealed that the unbelievable price is for that portion of the population who hasnít had any hiccups on their credit report. The price may also be a lease that requires several thousand dollars to be put down on the car.

What is the best way to buy a car (new or used)? Is leasing the best option, or should you buy it? If you do purchase it, should you finance it through the dealer or somewhere else?

Buying a car
When buying a car, you can secure a loan through the dealer or from another lending institution. Loans are typically issued for periods of 36-72 months. A longer loan will mean lower monthly payments but more interest paid in the end.

Going through a dealer for your loan is convenient and can lead to special programs like rebates and dealer incentives. It can also lead to a higher interest rate, however. Make sure to check your credit report before applying for a loan (www.freecreditreport.com or www.annualcreditreport.com). This will alert you to any potential issues.

Leasing a car
A lease normally means lower monthly payments than securing a loan and buying a car. People who like to change cars on a regular basis often prefer this option.

Car leases, though, often come with pitfalls like mileage limits (12,000-15,000 miles per year). Going over those limits can cost 10 to 15 cents per mile! Leases can also require higher down payments and can come with penalties for excessive wear and tear on the vehicle. Make sure to try to secure a lease with a higher mileage limit (15,000 to 18,000 annual miles). This will raise the monthly payment, but will save you money in the long run.

Paying cash for the car
When you pursue this option, you are not really reaching under your mattress for your wad of cash youíve been saving since the sixth grade. This simply means that you are going to secure your own loan and present the dealer with a check.

There are several good outlets for securing auto loans. You can do these online and get pre-approved so you will know exactly how much car you can afford before you begin shopping.

Post to Del.icio.us  Post to Digg   Post to Fark  Post to Google  Post to MyWeb  Post to Netscape  Post to Reddit  Post to Technorati

Let people know what you think
We do not post your e-mail address. Nor will we share, sell, or give it away.

Name
E-mail
Comment