How to Buy a Car

One of the easiest ways of throwing away your hard earned money, next to taking a trip to Las Vegas, lies in buying a car. The auto retail industry is one of the greatest money traps ever devised and the average consumer has little hope of beating the odds when purchasing a new or used car. Here are some tips on how to avoid losing your shirt at the dealer’s table next time around. Read to the bottom of the page and you will find a car loan calculator for estimating your payments.

Doing your research

Never walk into a dealership before researching your intended purchase by talking to friends, your neighborhood mechanic or trolling the internet. There are many internet sites that offer free information on prices for the basic car, and in particular, option packages. Markups on some of these packages can run as high as 100%. Having narrowed your choices to a few models you may want to start thinking about the long term effects of what you are buying by running the numbers through a car loan calculator.

Start by gathering information on reliability issues and repair costs. This can save you some grief later if anything breaks just outside of the warranty period. You may want to think about buying an extended warranty while you are doing your research and now is the time to start adding that figure to your total purchase price. If you intend to keep the vehicle for the life of your loan and beyond, an extended warranty could save you gobs of cash should your transmission or engine fail. Many vehicles come from the factory with expensive navigation and audio systems installed so make sure your intended warranty covers those as well. And never, ever purchase an extended warranty from the dealership as the price will include their markup too.

Gap insurance

Here’s where you can avoid a nasty surprise. Let’s say you bought a car for $20,000 and after two years you are broadsided at an intersection by the town drunk. You would expect to call your insurance company who would cut you a check for the value of the car so you could pay off your note and go buy another car. But you may be surprised.

After two years, you may owe $15,000 say on your car loan. But as car values often plummet 25% in their first year, by year two your vehicle may be worth only $12,000. Guess how much money you will recover from your insurance company? You will find yourself on the horns of a dilemma as you are $3,000 short of paying off your loan. Of course, this is a rough example and gaps may vary. Gap insurance covers the difference between the insurance valuation and the remainder of your loan. And, as before, don’t buy this at the dealership either.

The fine print

Having done your research and walked the gauntlet at the dealership, you will be invited into the inner sanctum of the finance office. This is where the dealership often recoups what they lost on the sales floor in order to make the deal. And this is where the numbers often do not add up. The finance office makes its money by selling you extras that don’t come from the factory, such as the aforementioned extended warranty and gap insurance deals. The markups can often be more than they made selling you the car itself. Then there’s the paperwork.

Quite often you have been left in a weakened state sitting in the sales office for three or more hours. I have a friend who spent 7 hours in a dealership buying her dream car and was very groggy by the time she got to the finance office. She did, however notice that the finance manager was offering her a 10% car note despite the fact that her credit score hovered around 750. This is the point at which your laptop or car loan calculator becomes your friend.

Add the numbers

Make sure you inspect, then add the numbers on the contract and ensure they add up correctly. You would be surprised! Your next step is to run the numbers through a car loan calculator or downloaded program that will tell you whether the cost of the vehicle plus junk fees at the quoted A.P.R ends up at the monthly payment you expected to find. A ten dollar difference over the life of a 73 month car loan means a whopping profit for the finance office, on top of the markup they made on the car, the dealer junk fees and the check the manufacturer mails them as part of their incentive program. But you knew about those checks didn’t you?

If you suspect the numbers are not adding up you may want to consider walking away. Remember, no matter how much you love the car, there’s another one very much like it on the way from the factory to the dealer down the street. Now is a good time to visit your bank or credit union with the negotiated price of the vehicle in hand. I prefer credit unions whose rates are often the lowest available. Arrange your financing there and return to the dealership with your check in hand. You may find that you have saved yourself several hundred, and sometimes, several thousand dollars over the life of the loan.

Find Affordable Car Loans – Cheap Rates For New and Used Cars For Everyone

We all know how important is to have a car. What many don not realize however, is that to get access to a loan to get used or brand new car, your credit needs to be absolutely flawless. In fact, your application might get denied just for missing a single payment on your credit card, mortgage etc. So, if you happen to suffer from a very bad credit but still looking for affordable car loans here are several things you need to take into consideration.

A lot of people who have bought cars before know how affordable car loans work. You meet a salesman who convinces you to buy a used or brand new car. Then, you go into the office and your history gets checked. Depending on your credit history you might be lucky enough to get auto car loans or you might not. For people who do get it, they will end up with a gorgeous brand new car in their driveways – with several payments coming up for the next several years. On the other hand, people who did not get the funds might wonder if there is anything they can actually do to avoid this from happening again in the future. Answers is YES of course.

Remember, before even walking into a dealership, you should have a slight idea of the amount of money you wish to shell out. You should also have a budget and percentage rate in mind for the duration of the payment. Afterward, check out your whole household budget to decide whether getting affordable car loans for a brand new car would be smart for you to do in the end. Now, take a look at how often you make the minimum payments. If other debts exist that seem to bury you on a financial note, it might be smart to keep the car you already have instead. If it is possible, however, check out your history in payments. Were you ever late with these payments? If you answered “yes”, you have to improve your overall percentage rate by several points before anything else and then get ready for rejection after entering dealership.

Dealerships are never keen on risking their reputation; besides, if you cannot pay bills each month, you really should try to avoid getting into more debt. One other thing you should take into consideration when searching for cheap rates for new and used cars is to visit a lot of shops and search for dealers who seem absolutely desperate to sell. Several of these dealers will not even look at credit scores, provided you do not have a very bad credit so there car loan might be an option. If you are convinced that you will be able to make payments based on your income than go ahead and do a research on cheap rates for new and used cars.

Lastly, when it comes to safeguarding affordable car loans, you need to sharpen your negotiation skills. Never accept first offer, otherwise you will look like nothing but a fool to your car salesman. However, if you barter and negotiate tactfully, you should be able to significantly decrease your percentage points, directly affecting the monthly amount you have to pay. Searching for affordable car loans really is not that hard, provided your credit rating is decent and your income per month along with your bills show ratios of debt to income that will turn you into an acceptable candidate in getting that used or brand new car you always wanted.