| DEALER AUTO FINANCING | | | | payments that you can afford. |
| Car dealers are notorious for using hardball tactics in | | | | A good idea would be to use an auto loan calculator |
| order to try and sell you a vehicle. The same holds | | | | so that you can anticipate what kind of rates to |
| true when they try to get you to utilize their dealership | | | | expect and how much it will cost you every month for |
| for financing. | | | | different loan terms and amount. |
| Featured below is insightful information that will help | | | | The Dealer Makes Money from Your Financing |
| you understand how dealer financing works, helping | | | | As a result of the millions of dollars in business dealers |
| you avoid the chance of being 'ripped' off. | | | | send to banks every year, the banks offer very good |
| Staying Away From Monthly Payment Traps | | | | interest rates for the dealer to sell. Meaning, the bank |
| When negotiating your new car purchase, the dealer is | | | | will tell the dealer they want 'X' interest for the car loan. |
| going to ask you how much you want to pay. They | | | | The dealer will in turn offer the customer a little more |
| will likely entice you by offering plans with very low | | | | than 'X' and pocket the extra. Its anything short of |
| monthly payments. Be aware that the lower your | | | | being very shady, but this goes on. |
| payments are going to be, the longer your loan term is | | | | Understanding the Rule of 78 |
| going to have to be, thus resulting in you paying more | | | | 'Rule of 78' is when all of the interest rate from your |
| money in interest over the duration of the loan. You | | | | car loan is paid off in the first year of the loan. This |
| want to find a loan amount and term that is going to | | | | means you won't be able to eliminate some the cost |
| get you the money you need without putting a strain | | | | of interest you pay by increasing your monthly |
| on your wallet. | | | | payment or by selling your vehicle before the |
| Avoid Becoming 'Upside Down' on Your Auto Loan | | | | conclusion of your loan. Also, loans that utilize the 'Rule |
| Dealers are also going to likely offer you financing | | | | of 78' will almost most likely result in you becoming |
| programs that require no money down or 0% interest | | | | upside-down on your loan. |
| for say the first six or 12 months. This deals sound | | | | Extra-fees and add-ons |
| great but in actuality are very bad. When you choose | | | | Dealers are going to look to squeeze every penny out |
| to leave no money down, or to reduce your monthly | | | | of you when applying for a car loan with them. Read |
| payments by increasing your loan term for as long as | | | | the fine print of any contract and make sure that you |
| possible, you end up become upside-down on your | | | | understand exactly what you are obligated to pay for, |
| loan very quickly. This means owning more for your | | | | and what you are not. |
| car than it is actually worth. | | | | In conclusion... |
| You can avoid becoming upside down by leaving a | | | | Before accepting any car loan offer from a dealer, do |
| minimum down payment of 20%. You can further | | | | your homework. Check out several online car loan |
| minimize the chance of owing more than you car is | | | | sites and services to see if you can find an loan that is |
| worth by utilizing a car loan for as few years as | | | | comparable, if not better than the dealer's offer. |
| possible. Be aware that you still want to have car loan | | | | |