Thursday, November 18, 2010

Getting Ready to Buy? Check Out these Financing Tips

As the end of the year approaches, it's a good bet that auto dealers will be offering some pretty sweet deals to clear out excess inventory from their lots.
So if you're tempted to take the plunge, here are a few financing tips to keep in mind.

--Know How Much You Can Spend
Take stock of your budget and determine how much you can spend. Financial experts believe that you should not spend more than 20 percent of your monthly income (before taxes) on car payments.

-- Do Your Homework
Shop for the best interest rate around on your loan. The dealer might offer you a nice rate, but if your bank or credit union can beat it, let them. Don't let the dealer talk you into taking a higher rate just for the convenience.

--Cash - It's All About The Benjamins Baby
If you have enough money to buy a new car outright—do it! But even if you can't, put as much money down as you can, so that you can lower your monthly payments and perhaps the term of your loan. 

--Know The Score
As in your FICO, or credit score. Knowing it before you seek a loan is good so that you will know how much interest you will pay during the period of your loan/lease. 

--Know The Term
That is, the length of your loan. The shorter the term, the more you'll save in interest charges. 

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