Crunching the numbers on your next car purchase
By Lou Carlozo | STM Custom Studios June 27, 2014 10:18AM
Updated: June 27, 2014 10:50AM
According to the U.S. Census Bureau, 11.8 million new motor vehicles were sold in the U.S. in 2010. That was up from 10.6 million in the previous year. Of course, buying a new car is one thing, but paying for that vehicle is another matter entirely. How should you prepare for the experience of financing your new car? Here are three tips that will make financing your next vehicle as easy as sticking keys in your ignition and driving away:
Determine how much car you can afford
The variables you'll want to consider include the vehicle price, your down payment and trade-in value for your old vehicle, along with sales tax, the interest rate of the loan and the term. If you're trying to hit a certain monthly payment that you can afford, your car salesman can help you zero in on that figure by taking these factors into account. Remember that lower payments may often translate to a longer loan term.
Examine multiple financing options
The Federal Trade Commission lists several types of financing options, including direct lending - through which buyers receive a loan directly from a bank, finance company or credit union - and dealership financing. The FTC lists several potential advantages to dealer financing, including convenience, multiple financing options and special programs that offer manufacturer-sponsored, low-rate or incentive programs to buyers.
Know your credit score
If you want to get the best rate possible on a car loan, you should do a little homework and find out your credit score first. Scores ranging from 760 to 850 are considered excellent; a credit score of 720 or higher is considered good. Anything lower than that and you can expect the interest rate on your loan to jump, so take time to clear any errors from your credit reports before financing a new car.
For more information about the financing options available for your next vehicle purchase, visit Webb Chevrolet in Oak Lawn or Plainfield, or call (708) 572-8429.