How To Find The Best Car Loan

Article Category: Finance  |   

Buying a new (or used) set of wheels can be fun, especially if you’re investing in your dream car, but if you don’t happen to have several thousand dollars lying around in your bank account, negotiating on a car loan can take the thrill out of the transaction.
Car Loan Application - photo
Recent research has discovered that fewer than a third of car buyers consider car finance options before heading to the dealership. It’s worth your while not to neglect the ‘money side’, however, as just a little time spent investigating low or 0% car loans could save you thousands on the overall cost of your car.

How much can you afford to borrow on a car?

First, check out how much car you can afford using our handy car loan calculator. That top-of-the-range Dodge Viper may be all the car you’ve ever dreamed of, but how will you feel if you have to live entirely from packet soups in order to keep the car loan payments up to date? Always double and triple check that you can easily afford the loan payments before entering into any car loan contract.

Start with the best buy auto loans

When looking for a car loan, start with best buy unsecured personal loans as these will save you a chunk of money on interest payments over the period of the loan. Be aware that these are only made available to customers with the very best credit ratings, so it’s worth checking that everything on your credit report is hunky-dory before you apply.

Read the small print

If you’re financing through a dealership, watch out for tricks – often they’ll make far more on the financing than on the actual purchase of a car. Always ask, “How much will I pay in total?”

Keep an eye out for 0% auto loans

Most car dealership finance options are far more expensive than simply borrowing on a personal loan, but occasionally the larger car dealerships will offer 0% finance on new cars. Whilst 0% car loans are definitely worth considering if it’s a genuine offer and not just 0% for a year followed by ‘normal’ rates, you may have to pay a large deposit upfront or even a higher price for the car.

Be pre-approved for the best car deals

Get your car loan application approved before you approach dealerships. Once you have confirmation of your car loan, you are effectively a cash buyer and can negotiate far harder on price. As well as haggling on the price, look for free extras such as extended warranties and service packages.

» Check monthly repayments with our car loan calculator.

Written by Jo Dimbleby

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Last update: 24 July 2009

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