March 4th, 2011

How to Make the Most Out of Your Car Purchase

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car purchase

**Today’s guest post is contributed by MoneyAisle.**

When you think about the first “big” purchases of your lifetime, a car is usually is one of them.

But, cars, like all other “big” purchases, come with a big price tag.

So, what can you do to make sure you’re getting the best bang for your buck when it comes to your wheels?

Ask yourself the following four simple questions.

1) New or Used?

If you are working with a tight budget, don’t get your heart set on a new car… and don’t get too upset about a used car either!

It is actually more logical to purchase a used car, since new cars depreciate in value within the first year. Look at cars that are only 2-3 years old, but still run and look like new.

2) Have Anything to Put Down?

If you’ve saved enough money to purchase your car in full, congratulations! If you’ll need a car loan to help you with the financing, decide how much you have for a down payment.

A higher down payment means you can reduce the amount of money you borrow, which lowers your monthly payments and the amount of interest you’ll pay over the life of the loan. Remember to try and be as realistic as possible when it comes down to how much you can afford.

3) How Much Am I Looking At?

Having a loan means you must also consider what the car will cost you in the long run.

The common assumption is that the lower your monthly payment, the less money you spend to pay off your car. However, higher interest rates can mean paying off thousands extra in interest in the long run. So, make sure you pay close attention to the interest rate.

4) What’s My Score?

The majority of dealerships will offer less than 1% interest financing for those with super-prime credit, which is only 15% of the U.S. population. Get your credit score, as well as your auto insurance score, for free with Credit Karma and learn what appropriate interest rates fit your credit profile; you want to be prepared when it comes time to signing off the best deal available for financing your car.

Buying a car is an exciting experience, but if you prepare yourself by asking these basic questions, you’ll not only get a new car, but the best deal for you, too!

MoneyAisle.com is your online location to make finding the best interest rate on car loans and refinanced car loans efficient, simple, and organized. MoneyAisle’s exclusive network of over 150 financial institutions will bid to give the consumer the best deal. Without any personal information required, consumers are empowered to find the best interest rate hassle-free.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

5 Comments

  1. Thanks for this post. It is very useful and beneficial for those who wants to make most out of car purchase.

    Mack trucks at 3:19 am on March 7, 2011
  2. The best car purchase plan is getting a pre-owned car where the depreciation in value has all ready occurred to the previous owner and putting 100% down. You get a better deal and you get a car that you can afford. The worst car accidents are the ones that happen on the showroom floor when not paying 100% down.
    Just do the math. If you get a car with a loan, you are paying more for the car than the sticker price. Wouldn’t that $200-400 a month car payment be better used by you somewhere else?

    My recommendation if looking at a car; 1) look at preowned so you pay the value of the car and do not lose as it drives off the lot. 2) Never talk about how you are paying while looking at at car. Find a car or two you like, test drive them and then negotiate the total price. THEN after you agree on price, tell them you will pay 100% down. If you tell them you are paying for it all at once and not taking a loan, they will not negotiate the price with you since most of their money is made in the loan, not the sale.

    Art at 8:28 am on March 8, 2011
  3. This is a great article which clearly states the important facts regarding Car Purchase planning.Basically,Auto Insurance and Fuel Cost of car is also the must part of such planning.

    SukhdeepS at 2:00 am on April 19, 2011
  4. My general tip would be always buy a car with Full Service History. Any vehicle I’ve bought that hasn’t has always never worked out financially.

    Anonymous at 7:56 pm on July 2, 2011
  5. Putting a good down payment on your auto loan is always great. I learned this the hard way.. I wish I had read this post few months back.. Great Planning Tips

    Linda at 9:02 pm on January 22, 2012

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