Posts tagged ‘financing options’

Auto Financing Tips

If you are looking to buy a new automobile no doubt you have already started doing your homework. Comparing vehicles and models, accessories and mileage and checking out an abundance of dealerships to see who has the best price for the exact vehicle you want to drive.

You need to do the same thing when it comes to getting financing for your new vehicle. Financing options abound, and everyone has a slightly different rate with slightly different terms. It is up to you, the consumer, to find the deal that is right for you.

The process of finding a financing option which is best for you can seem daunting but there are at least a few things you can do to make the process a lot less painful and lot more effective in the long run.

Dealer Financing

In many cases the dealership will work to help you find an option that you can handle. Remember, they want to sell you a car, so it is in their best interest to help you buy it, but there is only so much they can do. The rest is usually up to you.

Start by comparing financing options available at institutions other than the one your dealer recommends. Don

Best Times to Get a Car Loan

Believe it or not, when it comes to financing a new car purchase timing is everything.


There is a good time and a not so good time to seek a loan for a new automobile. Knowing when is the best time to seek a new loan can save hundreds, maybe thousands of dollars in interest.

During the recent global recession not many people were in the market for a new car, but for those who were (and if they had a great credit rating) there were a plethora of zero percent interest financing options available. There were also cash back options and rebates galore. Dealers, banks and manufacturers were offering just about anything to get folks to buy cars again. For those who took advantage of the deals there were great savings.

Less Popular Vehicles Can Get You a Better Deal

If you missed the buying deals of the Great Recession there are still plenty of good times to finance a new automobile. Look for models which are falling out favor with buyers. They don’t need to be models with defects or prone to repair problems. Look for vehicles that have simply fallen out of favor with buyers. When gas prices spike large vehicles, trucks, vans and SUVs are usually the first vehicles to lose sales. If you are in the market for a large vehicle wait until gas price spike again and then reap the benefits.

The Season

The season can also have an impact on vehicle sales and lead to buying discounts. Not many people are looking for a convertible in the middle of winter. Dealers will do just about anything to put you in a summer car in January, so look for the best deals on those cars when the days are short and there is snow on the ground.

End of a Model Year

The end of a model year is also a good time to find a great deal on a new car. Dealers are anxious to move the old vehicles off their lots to make room for the new vehicles. The best bargains on new vehicles can be found just before they are replaced by the forthcoming models. This usually happens in September or October, but could happen any time. So, ask around before you buy to see if there are any close out deals to be had.


Incentive time is a great time to buy a new car. Manufacturers offer incentives to move inventory off dealership lots. They offer these incentives to dealerships which may or may not pass them on to buyers. If you know they are out there you can ask for them and negotiate a better deal for yourself.

The End of the Month

The end of the month is also a good time to get a good deal on your new car or truck. Manufacturers incentives always end with the month and sales people know this. They would rather pass those savings on to you rather than lose a sale.

Be a savvy shopper, do your research and look for the best deals that are out there. Knowing when to shop is half the battle!

Options and Solutions to Car Financing

If you plan to buy your next new car with cash then the process is simply and straight forward: Pick out the one you like, negotiate the best deal you can and drive it home.

If, however, you are like the majority of new car buyers and need to finance your purchase, you have a couple options.

Buying a Car

First, you could apply for a loan, put some money down and buy the vehicle you like. This is the route most buyers take. The traditional method has you putting more money down on the price to lower your monthly payments. Lenders like it when you put money down on your new vehicle because it shows them you have a vested interest in paying off the loan so you protect your investment.

You should still negotiate the best deal on the purchase price. Also, don’t be afraid to shop around for the best financing deal available. The dealership you buy your new car from will have some options available for you but they are rarely the best deals out there. Look online for some comparison rates and use the payment calculators to help you figure how much of a new car you can afford. You should also visit the bank where you deposit your paycheck and the local credit union. They both have financing options which will likely differ from what you are offered at the dealership.

Leasing a Car

If you are not sure you want to buy your vehicle outright and want to pay less down and have lower monthly payments perhaps a lease is a better deal for you.

Leasing a vehicle means you never fully own the vehicle, you merely pay for the right to drive it around. The dealership will continue to own the vehicle and will therefore perform all schedule servicing and maintenance of the vehicle for free while you drive it.

There are two major draw backs to leasing a vehicle rather than buying it, however. First, the obvious, the vehicle is never really yours. At the end of the leasing agreement the car reverts to the dealership. You can look to lease a new vehicle if you like, but all the money you paid for the previous few years is gone in the form of leasing payments.

There are also severe limitations to the number of miles you can drive your leased vehicle every year. Usually leases are limited to between 12,000 and 15,000 miles each year. If you exceed this limit you pay extra for every additional mile you drive. This can add up to a lot of money if you go over the permitted by a few hundred miles.

With a traditional purchase you end up owning a car that you can continue to drive until it falls apart underneath you. Or, you can resell the vehicle and use that money to buy another new car.

With a lease you drive a like-new car every day for a few years, pay less for the privilege, but end up with no car when the deal is done.

Two big options, but in the end, the choice is up to you.