The Financial Guide Teaches You before Going for a Car Purchase
You’d be making a mistake if you buy a car thinking it is a great investment. It is a necessity rather than an investment!
We all need a good ride to get to our work or manage other commuting needs, but cars depreciate, and they do it like crazy, so they are nowhere near an investment. But you still need a car, and if you don’t have that kind of big cash lying around, then you can use auto-financing or short term loans to finance your car.
In today’s blog, we will be discussing ways to finance a car and tips to help you save money on your car loan. Read on to find out more:
1- Know your credit score before you make way to the dealership
If you ask us what’s the best time to do a credit check, then we’d tell you that it is right before you decide to buy a car and apply for a loan.
The truth is bitter: It is relatively easy for banks to repossess a car if you don’t pay so you will get a loan or financing option even if you have bad credit. You will pay a lot higher than usual! Alternatively, you can go towards direct lenders, ensuring bad credit loans in Ireland.
Dealerships generally advertise excellent interest rates on new cars but forget to tell their customers that these rates are only available to buyers with an amazing credit score. Buyers with a medium credit score may still get a great interest rate but not be eligible for best promotions.
The poorer your credit score, the crucial it becomes to research around for cars and ensure that you have the competitive rate that a lender can set for you. You will still be paying higher than someone with good credit but still after a lot of bargaining, and you definitely won’t be paying the first-rate that somebody offers.
2. Get quotes before the big show.
If you have the best credit score, then you know you will get the best options for financing from the dealership. The question arises what to do when you have less than splendid credit. Fill out credit applications; check out the maximum amount you can spend on the car and the interest rate that you have to pay for this financing option.
The good part is that you won’t have to use these credit applications if you get a better deal at the dealership and would walk out the door knowing that you beat higher interest rates. If the dealership offers you higher rates, then your homework will help, and you’d get better rates through the credit applications you filled out earlier.
3- Keep the financing term as short as possible.
Shorter terms mean higher monthly payments but lower interest rates, so they are beneficial in this way that you don’t’ have to pay a very high-interest rate. When you walk into the dealership, talk to the salesperson that you want to keep the term short with high monthly payments depending on how much you can pay without stretching your resources.
The sales representative will show you lower or higher payments plans without reducing the price of the car, but you will pay lesser in interest if you pay in the short term. It might be tempting at first to stretch out an auto loan over many years to keep the monthly instalment light but if you want to pay less, better make the term short.
4- Explore more financing options for your car
If you are not happy with what the dealership is offering you, then you should consider taking out other loan options available in the marketplace.
Suppose you do not have a full-time job but already booked a car before losing the employment. Now to cover the funding gap, you can utilise other financing sources accessible like cash loans for unemployed in Ireland.
Fill out as many applications as you can fill out and check out what interest rates are being offered to you. You can take out such small loans to buy the car you always wanted but be careful and frugal when you purchase the car.
In the Nutshell
You may have the tempting credit score and even more tempting offer on the car you always wanted. But be sure to check that the car you take home is indeed the one you can afford in the short and long term. Just because you have the credit to buy a BMW doesn’t mean you should. So explore your options and check the interest rates on auto-financing and then make a wise decision regarding buying a car.