So You’ve Decided to Get a New Car…
Once you’ve made the decision that it’s time to get a new car there are some preparation steps you should take to fully understand what you are getting in to.
Step 1: Decide what car – make, model, year, etc…, that you would like. This is vitally important, because besides gas mileage and design other factors will be dependent on this. Such as…
Step 2: Get several insurance quotes for that vehicle – full coverage quotes, as most lenders require full coverage for loans. There can be surprising discrepancies between similar makes and models in given regions, and it’s up to you to find out which car offers the best value in terms of style/performance/mileage versus insurance.
Step 3: Now it’s time to go to the loan calculator. Play around with different amounts, interest rates, and terms. A one percent increase in interest rate coupled with an extra 24 months tacked onto the term can mean a lot more money paid out in interest, even if it seems minimal on paper.
And just so you know, you switch the orders of steps 2 and 3.
Step 4: Put all your research on paper. There are a few reasons for this. First, it shows lenders you are serious about your commitment to the loan and intention to pay it back. That instantly lowers your risk and can result in a lower interest rate on the spot. It also shows unscrupulous dealers that you know what you’re getting into and will be harder to con. So it’s an all round winning combination for you to do your homework.
Step 5: See your plan through. Put it in writing, tell a friend, or do whatever you have to do to make sure you keep up prompt payments. Remember, this is a major line of credit and will put you in good standing if you repay it on time.
All told, this extra work shouldn’t take more than 1 hour total. Just get it done, and it may actually save you some money. Just make sure you’ve planned out your expenses and don’t stray out of your budget. A little bit extra here and a little bit extra there soon adds up.
Good luck with your next car, and safe driving!