Make a Higher Down Payment to Get Low Interest Rates On Your Car Loan

Before you buy a car there are several things you need to do first. Deciding to take the leap is the first step. Very few people buy a car on a whim. Several months of contemplating go into the decision, especially if you are on a tight budget. Use these months to save up for a down payment. If you are considering a new car, you have figured out your budget and you already know how much of a monthly payment you can afford. Set this amount aside every month. If you are prepared to spend this money on car payments, then going without that sum a few months earlier should not be a problem.

Your Planning Months

These months of contemplation are your planning months. With the money you set aside you will have a nice down payment when the planning is done. This is also a good time to clear up other debts. The more money you can free up the less stressful the whole process will be. The less other financial obligations you have the better chance you have of getting a good loan deal.

If you can’t pay everything off out right, then consolidation may be an option. This won’t lower your debt, but it will lower your monthly obligations.

Choosing the Right Vehicle

The next step is deciding what type of vehicle you want and need. Sometimes there is a huge difference between what we want and what we need! If the car is going to be used by other members of your family then their needs have to be considered, as well. And don’t forget the other costs involved with owning a car. The monthly payment is the big one, but there is also insurance, maintenance, fuel, etc.

Finding the Vehicle You Chose

Once you have all the wants, needs and financial details worked out you are ready to start looking for a vehicle that fits the bill! The Internet is the easiest place to look. You could drive from dealership to dealership. Not only is this time consuming, you take the risk of getting sucked in by a savvy salesperson and end with something way over budget and a loan from a lender that does not have your best interest in mind. Remember, the dealership gets a bonus or incentive for arranging loans. The best bet is to come armed with your loan in hand! This puts the negotiating power in your corner where it belongs.