Auto Loans

Don’t Get Stuck on the Sticker

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Shopping for a new car can be a lot of fun, but it can also be a big headache if you’re not careful to negotiate both a great sales price and great terms for your financing options. While most people will spend days or weeks of their precious time to get the best price for their new vehicle, less than a quarter of them will spend more than a few hours to investigate how they’ll pay for that shiny new car.

If you’re in the market for a new car, make sure to do your homework about how you’ll finance it. In an ideal world, you’ll be able to find a balance among the money you’ll pay for the monthly payment, the cost of car insurance and maintenance the car will require, and the overall, total cost of the vehicle.

Look at the Big Picture

The amount you’ll pay monthly encompasses much more than just the car payment. You need to consider the length of time you’ll be required to make payments, how your current car insurance premium might be affected by your new purchase, the cost of maintaining the vehicle, and other incidentals such as parking, gas economy, and cost of major repairs.

When you’re knee-deep in negotiations with your car dealer, remember that most of them will discuss the terms according to monthly payment. Don’t be afraid to ask them to reframe the numbers according to the total amount you’ll pay over the life of the loan.

Shop Around, Then Buy

If you’re serious about buying a car, you should try to be more serious about financing said car because the lender you choose could mean the difference between high monthly payments or paying on the loan for the foreseeable future. If you’ll need to finance your new car, remember that the dealer isn’t always the best option for loans—you might have better luck and more economical options by heading to your local bank or credit union!

Read the Fine Print

Before you sign on the dotted line and drive out of the lot, be sure you fully understand all of the terms of your loan. This includes everything from APR to any dealer-initiated clauses. At the very least, make sure you’re not agreeing to any type of conditional financing arrangement. These kinds of financing options are very risky and can be amended at almost any time by the dealer or bank, even after you drive away with your new car.

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