How to Get the Best Car Loan
Obtaining the bestcar loan is as important as choosing the right car
. After all, you don't simply choose a car because it is the right colour, you check out the size of the engine, the accessories, its on road performance, the warranty and reviews from experts.
It should be the same with your car loan too, because if you choose the wrong loan you could end up paying hundreds or maybe thousands of dollars more for the car of your dreams.
Remember that it is not the price of the car you should be concerned about as much as the price of the loan because that is what you are really paying for your car. A $20,000 motor vehicle financed with a car loan at 10% over four years will mean that the vehicle costs you $24,146.86 over the term of the loan. You may pride yourself at getting a discount of $500 from the dealership, but if you were able to negotiate a cheaper loan you could save a heck of a lot more.
So how do you go about getting the best car loan in the first place? Follow these simple tips and you'll be well on your way.
Do a budget. This is a vital step and one that is often neglected by many borrowers. You may be surprised to find that lenders are more than willing to give you money, sometimes more than you thought possible. But, at the end of the day you should be able to live a comfortable lifestyle without it being compromised by heavy debt commitments. That's why it is important to make a decision about the maximum you are prepared to pay each month and at the same time be happy with the way you live your life. Having a budget is the only way you can be certain of this.
Be prepared to obtain at least three quotes from various lenders. Every lender will have their own particular criteria and will have
car loans at various rates of interest. Make sure there are no ongoing monthly fees or, if there are, make sure you take that into account when doing your budget. A $10 monthly account keeping fee raises the effective interest rate substantially, so it is important to compare apples with apples when looking at home loans from different lenders.
Beware of early repayment fees. It is quite common for people to sell their motor vehicle before the loan has been paid out, or they may wish to make extra repayments to pay the loan off early. This is always a good idea because you can save substantial amount of money on interest payments. However, if the lender charges you an early repayment fee it could negate the savings and leave you with a sour taste in your mouth.
Follow these simple steps and do your homework before deciding on a car loan. The best way to compare car loans is to incorporate all fees and repayments and work out how much the loan will cost over the term of the loan.
How to Get the Best Car Loan
By: Todd Bertshinger
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