Did you know that you're being targeted for
car financing from the moment you step into a car showroom. Whether you're getting a new, used or classic auto, one of
the things that you will be eventually offered if you decide to purchase is
auto finance packages with predetermined rates.
In essence, what's happening here is, the car dealer is making money on two deals. Once when they sell you the used auto and
then again when they sell you their prechosen car financing packages with already pre determined rates. The sad part is that most people
usually just say yes to whatever deals they get offered, probably because they are blinded my the shiny new car.
Think about it, would you drive to the middle
of the desert to buy a bottle of water? If you did it would probably be more expensive than going to a classic city
convenience store. This can be what it's like to get car financing right from the same dealer who's selling you your
automobile. It dosen't matter if you're financing a used, new or classic car, you're limiting yourself to one set of rates
and terms with nothing else to compare to. Used
automobile dealers love to use this classic convienience factor to
make even more profit and why not? It works!
Compare Car Financing Rates
Offered By The Dealer To Auto Finance Deals Offered Online Or At The Bank Before Deciding
Although not all new and
used car financing being offered at dealers is
necessarily bad or over priced. In fact many of them offer great deals and great rates on new, used and classic auto finance.
Just make sure you do some comparison shopping (especially online) and realize that just because you purchase a vehicle
from them, doesen't mean you have to go with the financing options, package, rates or terms they are offering. You are
completely free to get your money elsewhere. For instance you could go get a loan from your bank, pay for the car
outright, and then just pay off the loan to your bank who will probably give you a better
interest rate, because that's they're primary business.
That's what they are there for.
Also always make sure you know exactly how much
you are being charged for auto finance. The classic way to calculate the charge of any credit is by using the
APR or annual percentage rate. This
calculates the cost of the loan using a standardised formula and all lender's must follow and (if you're familiar with) can
help you understand car financing whereever you get it from. However, just because the APR from one auto dealer looks
attractive does not mean your search is over. You must always also find out how much the new or used vehicle would have
cost you if you had paid for it outright with cash, then make the comparison and see how much you're really paying.
Some used car dealers that offer auto financing
lead you to believe that you're getting a cash discount rate for paying in cash. This is not always completely true
because providing a cash discount can be exactly the same as charging extra for credit. A classic car finance terminology often misused.
If you actually do get a lower price on the
used or new vehicle for paying in cash, then you 're probably better off getting the loan from another financing source
and paying for the car with cash, this will take advantage of the better price and you will have a smaller amount to pay
back to the lender.
Don't Just Look At Good
Car Financing Rates, Judge The Down Payments and Closing Payments Online Or Off
The other thing you need to be careful with
is the down payments and closing payments with some of these so called "financing deals" on new and sometimes even used
or classic cars. These are payments that are made at the start or
end of the term of the loan, and while the monthly payment terms may be attractive, it could well be the case that there
are large additional payments to make and you should not forget to calculate these into the total price of the financing
you are reviewing.
Another good option is to search for car
financing options online and spend some time reviewing and comparing rates and packages. Always make sure you read all
terms and conditons carefully and make sure you consider all factors involved when deciding which auto finance package to go with.
As you can see car finance is just about as
important as the deal you get on the automobile in the first place and this is why you should always consider getting a
good deal on the financing as just part of the process of purchasing a new, used or classic auto. It only takes one little
mistake to lock yourself into paying more month after month, so don't just go with what you're offered. Compare and save.
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