Get the Best Deal
There are several things to focus on while you're searching to find the car and auto loan that fulfills your needs. Know what you want before you begin your search. The internet has made searching for a car easier than ever. You can go online to find the car of your choice, find out your credit history, finance your car, and determine how much your trade-in is worth. Do your homework first and you'll already have the upper hand.
One way to save money on your investment is to buy a used rather than new car. The minute you drive that new car off the lot, its value drops drastically-but the loan payments don't. And most used cars now come with service and warranty packages. Don't use car dealerships' financing offices. Using the internet to find financing options will save you time and effort. And often you'll save substantial amounts of money. Furthermore, make the largest down payment you can afford on your new vehicle and look for a short-term loan to save even more money. Remember to bring your financial paperwork from an online loan agency to the dealer when you begin the search for your car.
Auto Loan Jargon
Get in the driver's seat before you step foot in your next car. Knowing the terminology of the auto loan industry will help you during your search. Here are some important phrases:
Annual Percentage Rate (APR): The interest rate you pay for your loan, usually conveyed as a yearly rate.
Dealer Hold-back: Dealers sometimes sell vehicles for less than invoice price, but they still need to make their profits. Hold-backs are sums of money-around two or three percent of the car's manufacturer's suggested retail price (MSRP)-given to the dealership by the manufacturer.
Sticker Price: The large stickers, required by law, to be shown on the car window. They list the base price, standard features and add-ons, fuel economy, MSRP, etc. Obviously, the sticker price is going to determine your auto loan payment. They are also known as Monroney stickers.
Finance Rate: The interest rate that your auto loan agency charges for their service.
Trade-in Value: The value of the vehicle you're trading in determined by the dealer, which is typically less than the car's wholesale value.
Upside Down: A term meaning that the balance of your loan surpasses your car's value. During the first year of your loan your vehicle depreciates in value rather rapidly. It's common to become "upside down" this period. "Upside down" can also be applied to situations where the car you're financing has been damaged.
