Posted on: 11 July 2018
Auto loans have become somewhat of a normal expenditure for the majority of households today. In fact, according to statistics from 2017, an estimated 107 million people in the United States currently have one or more outstanding car loans, which is 37 million more than just five years earlier. Because having car debt is something that most households will need to consider, finding ways to save money on these loans is an important way to help make the household budget go farther. If you are preparing to shop for a car and will need to finance it, the following tips can help you save money and still get a great car.
Consider all the costs involved, instead of just the amount of the car loan
The first, and possibly most important, car buying tip is to do your research first so that you know all the costs involved for the vehicle you want to purchase, instead of just focusing on the price or the amount of the monthly payment. To do this, car shoppers will need to consider the purchase price of the vehicle plus each of the following factors to get the total cost involved in purchasing a new vehicle, including:
- vehicle insurance premium amounts specific to each model you are considering
- expected maintenance costs, based on available info about likely problems with a particular model, such as manufacturer recalls or known safety or performance issues
- expected fuel costs for the amount of driving your household typically does
- tax and licensing fees that will be part of the transaction
- interest amounts and repayment terms
Taking the time to determine what these costs will be for the vehicle you want to purchase before you shop can eliminate unpleasant financial issues after the purchase and help you keep the costs affordable for your family's budget.
Cut the loan amount with a large down, instead of taking on additional years of debt
An excellent way to trim away some of the costs involved when financing a new or used car is to treat it like a house purchase and put as much money down on the purchase as you can afford. With most car loan rates currently at 5.2 percent or more, being able to cut the amount financed can potentially save car buyers several thousand dollars over the life of the loan.
Another important part of saving money when financing a car purchase is to work with a reliable auto lender in your area. These financial experts can help you look at all applicable terms and loan types and choose the one that will be most affordable for your family's budget.Share