One of the most common mistakes made by people when they are purchasing a new vehicle is that they don’t include the cost of the auto financing in the final price. For example, if a Toyota Corolla is being purchased, the difference in cost between the “sticker price” and the invoice price (what the dealer actually paid for the vehicle) is approximately $1,500. A good negotiator may be able to save $1,000 or more on the purchase price.
If the vehicle is financed for four years with a six percent interest rate with no down payment, the interest is going to cost over $2,000. If the car is financed for three years at a four percent interest rate and the buyer has a $1,500 down payment, it’s possible to save more than $1,000.
If a buyer is willing totry to negotiate the cost of the vehicle, they should not ignore the terms and the rates of the financing. For those ready to buy, don’t wait to get to the dealer’s office to consider financing.
Tips to Make Financing a Vehicle Easy
A vehicle isn’t an investment. In fact, the opposite is true because cars depreciate significantly. For this reason, it isn’t very smart to pay interest on the loan.
What occurs, in most cases, is that the car will depreciate and its value is going to drop faster than the loan can be paid. This is going to leave a person underwater or upside down in the loan. However, virtually everyone needs a vehicle.
While this is true, it doesn’t mean they can’t make a smart purchase. One of the best ways to make this smart purchase is by using the services of a company like Consumer Portfolio Services. This is going to ensure that the terms meet a buyer’s needs.
When it comes to financing a vehicle, there are more than a few factors to consider. Be sure to keep the information here in mind to get the right car loan for a person’s needs and one that has favorable terms. This is crucial to make a good financial decision.