The New Year is a popular time for people to buy a new car. One thing that most people agree on when it comes to buying a car is that getting a good deal takes time and effort. The best way to ensure you get the best deal is by doing your research before you take a test drive.
A car loan is much like a mortgage loan, in that some deals are better than others. When looking to finance a car it is important you follow a few guidelines to ensure you don’t get over your head and end up with credit trouble.
1. Know your budget — many people end up in credit debt or loan trouble when the fail to consider their budget before applying for a loan. Before going shopping for a car, sit down and evaluate a monthly payment that you can afford. Don’t max out your monthly amount when you do get ready to buy. Remember that just because you can afford a payment now, consider how much you can realistically maintain if financial hardship were to strike. Also, insurance, gas and maintenance costs are all part of how much you should allot to pay each month for your vehicle.
2. Shop lenders — when you are applying for a car loan it is important that you consider which lender you are using. Although some car dealerships may push you to use a particular lender, there are instances in which that lender may not be the best fit for you. You may need to look for the right lender before finding a dealership that can find you the car you want. Many people underestimate subprime lenders, or those without the big name and fancy corporate buildings. In some cases, smaller lending institutions can offer you a better loan than the bigger guys.