Tips for Financing a New Car


There are many mistakes people can make when buying a new car, but one of the most expensive mistakes is forgetting to include the cost of financing into the overall cost of the car. The rates and terms of your financing could add up quickly, so it’s important to pay attention to those details.

To help you avoid these pitfalls, we’ve put together this article of tips for financing a new car, so you can be prepared to get the best deal possible on your purchase.

Know Your Credit Score

Your credit score impacts your ability to get a loan or credit, but it’s much easier to get a car loan with bad credit than a mortgage or credit card. This is because it’s much easier for the lender to repossess the car and recoup their loss if you default.

If you have bad credit, you’re not necessarily forced to accept any rate that’s offered to you. You can check if there’s a lower rate available, and if you’ve done your research, you should have a good idea of what rates you can qualify for ahead of time. Shop around and determine what the best rate is for your credit, that way you can ensure that you can truly afford your purchase.

Get a Short Auto Loan Term

Get Financing Rates Before You Car Shop

Put 20% Down

There are many ways to adjust your car loan to suit your budget. You can choose a long term with low payments, which results in more interest, or you can choose a short term with higher monthly payments and lower interest. Generally, you want to go with the shortest loan term you can afford, so you’ll save money on interest in the future. Whether your credit is bad or good, you should still find out what options are out there for you. Many online lenders let you fill out an application and give you your rate and total amount right then, so you can have an idea of how much car you can afford. Your local bank and credit union are the best places to start looking since they usually have the best rates for people looking to finance new and used cars. Down payments are another way to reduce the cost of the car and lower your interest. This also helps you avoid a negative equity situation, in which you end up owing more on the car than it’s worth. As a general rule, try to put at least 20 percent of your car’s total cost down, which lowers your loan, your interest, and protects your investment for the future.

 

Visit Montgomeryville Nissan

Now that you’re equipped with these tips for financing a new car, you’re ready to head to a dealership to shop! At Montgomeryville Nissan, we stock a huge inventory of new Nissan models for you to choose from, all at excellent prices. If you’re in Philadelphia, Lansdale, or Doylestown, stop by Montgomeryville Nissan to browse our inventory and schedule your test drive today!

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