Sign In | Sign Up | Help | Invite    
Advanced Search Ask A Question Community Recent Changes
My:             Contributions   
Contributors
{for ul in pageInfo.page}
${ul.nickName}
{var al = toBreakWord(ul.adUrl,18)} {if ul.adSentence !=''}${ul.adSentence}
{/if} {if ul.adUrl !=''}${al}
{/if}
 
{/for}
Earn Free Advertising   +   Earn Money By Writing What You Know at WISTEME.COM
Question Discussion History

Edit
    Question ID:   1522         Current Version: 1
Question: Are there any tips of reducing the cost of an auto loan?
Category: Automotive & Transportation > Buying & Selling
Keywords: reduce cost, tip, buy car, vehicle, manage, automobile, auto loan
Type: other
Rating:(0 ratings)    Views: 580    Discussions: 0   In Watch Lists: 1  

 
    Answer:
Stereos and tinted windows aren't the only options you'll need to consider when you're ready for your next vehicle. Also look closely at your different choices for financing a new car. For many people, an auto loan is their second biggest monthly expense after their mortgage or rent. Here are some strategies to consider.

Shop for a loan before you visit a dealership or bid for a car over the Internet

After reviewing your credit report to correct errors, ask your bank and several other lenders about their loans and costs so you are in a better position to get the best possible terms. If you're a homeowner, you could also consider using a home equity loan or line of credit instead of a traditional auto loan, but remember, you could lose your home if you can't repay the loan.

Know what car dealers are offering in terms of financing by reading their advertisements, making phone calls or checking the Internet. Many dealers offer discounted loans (such as zero-percent financing) or cash rebates, but not both. In some situations, it may be better to accept the dealer's rebate and pass up the zero-percent financing in favor of a loan from a bank that does charge interest.

Think carefully about how much car you can afford and how much of a loan you need

The dollar amount of your loan largely will be determined by the sales price of the vehicle minus your down payment, any rebates and the value of any trade-in. Don't forget, however, the costs of auto insurance, sales taxes, annual property taxes on the car (if any), and options you may be inclined to buy, such as an extended warranty.

Also remember that every item you add to your loan instead of paying upfront will add to the total cost of the loan because you will pay interest on the amount financed.

Consider getting "pre-qualified" by a lender for a specific loan amount

This doesn't mean you have been approved for a loan, but it will help you know approximately how much you can afford to spend on a car and how much it will cost you in finance charges before you get to the dealership.

Consumer advocates also suggest that you not tell the dealer if you've been pre-approved elsewhere for a loan until after you've negotiated the best price on a car. They say that some dealers may be less flexible on the price of the vehicle if it's clear that the dealership won't be earning money on a loan.

Understand the costs and risks of choosing a long repayment period

A longer loan term will be tempting because it means a lower monthly payment, but that also means a higher total cost overall because you will be paying interest longer.

For example, a $25,000 loan at a seven percent interest rate for three years will cost $772 a month. Stretching the term to five years will drop the monthly payment to $495 but will increase the total cost of the loan by about $2,000.

There is another reason to be cautious with a repayment term of five years or more: The aging vehicle's resale value may fall below what you owe on the loan if the terms are spread out too long. In the later years of the loan, you'll still be making payments on what is an older vehicle that may have a lot of repair and maintenance costs. And if you decide to sell your car, you may have to come up with extra cash out of your own pocket just to pay off the old loan."

Read more questions from WISTEME through
     Add to MSN Add to My AOL
 Rate this Question
   Add to Groups   Add to Watch Lists   Share Question
                          
 
    More Readings :
[QID:1509]    How to get a great deal on a new car?  
[QID:1505]    Are there any ways to lower your auto insurance costs?  
[QID:1498]    What should I know when buying a used car?  
[QID:1530]    Are there any tips on cut spending and still getting to do and buy cool things?  
[QID:1521]    Are there any tips on reducing the cost paying for college?  
[QID:4541]    Are there any tips for saving money on your car maintenance?  
[QID:1508]    How to get your car ready for summer?  
[QID:1507]    How to get your vehicle ready for winter?  
[QID:1506]    How to choose the right repair shop for your vehicle?  
[QID:1502]    How to keep your vehicle in tune with the environment?  
     Question ID:  ${question.id}         Current Version:  ${question.version}

{for qh in questionHistory} {if qh.status == 'r'} {else} {/if} {/for}
Version Contributor Date (ET) Voting
${qh.version} ${qh.nickName} ${qh.date} Rejected
${qh.version} ${qh.nickName} ${qh.date} {if qh.status != 'c'} {if qh.status == 'a'} Approved {else} {if qh.rstatus == 'c'} On-going {else} Pending {/if} {/if} {else}   {/if}
Start a New Topic
ID Topics Replies Latest Post (ET)
{if dlist!=null} {for d in dlist} {/for}
${parseInt(d_index)+1} ${d.sentence} ${d.replyNum} ${d.lastestDate}
{else}
No discussion topic.
{/if}
Label Name:
 
Group Name:
 
 
{else}
     You have no group.
{/if}
Advertisements
{if advertisements.length > 0} {else} {/if}
{for ad in advertisements}
${ad.adTitle}
${ad.adSentence}
${ad.adUrl}
{/for}

Home | About Us | Terms of Use | Privacy Policy | Browse Questions | RSS Feed

Copyright ©2010 WISTEME LLC. All Rights Reserved.