Buying a car is a big financial decision. One of the first things to consider when buying a car is deciding whether to buy new or used. New cars cost more but it is easier to know what you are getting. Used cars can be a great deal as long as consumers take the time to do their research.
It is a good idea to have a firm idea of what you can afford before you set foot on the car lot. If you don’t have a firm idea it is easier to be swayed into buying something you can’t really afford. The consumer needs to figure out within their budget what kind of car payment they can comfortably afford. It is important to go off your budget now, do not count on a raise in a year and choose a higher payment.
When considering what you can afford for a payment, it is important to take into consideration matters such as gas prices, insurance costs, car repairs and the cost to maintain the car.
When it comes to financing there are many options available to the consumer. Financing is open to negotiation as well as the price of the car. It is best to request a copy of your FICO or credit score from one of the three major credit companies. These companies must give the consumer a copy of their report free, one time a year. The better the credit score is the more room the consumer has to negotiate a better interest rate.
Check with several banks and compare their interest rates. It also pays to compare dealership deals on interest rates. Some dealers may offer manufacture warranties, first time buyer’s rebates etc, but the term of the interest rate is over the term of the note, so compare offers carefully.