Securing Financing for the Purchase of your Car
Notice that we're recommending that you get your loan arranged even before you choose what car you want to buy. Many car buyers simply arrange for financing with the dealer that they buy the car from, and while this saves one step, you'll pay for this convenience, because the car dealer is almost never the cheapest source of financing.
Talk to your bank to see what terms they can give you on a loan, but don't be afraid to comparison shop. Compare interest rates from several banks and credit unions, because the rate differences can be substantial. If you own your home, consider a home equity loan, which lets you borrow against the value you've built up in your house .
You should expect your down payment to be between 0% and 25% of the car's purchase price. The average term for a car loan is 4-5 years; a shorter term will mean higher payments but a lower total cost because you'll be paying less total interest.
By InvestorGuide Staff
Posted in ...Personal Finance