Tips on Financing a Car

Helpful Tips when Financing your Car

Financing a car is not brain surgery, but it will take some thoughtful planning and careful preparation. You will have to find out the following information: the total purchase price before tax; your down payment; the term of the loan in months; the sales tax rate; and what the car loan calculator says how much it will cost to finance the vehicle. Here you will be shown the top five tips about how to finance a car.

In financing a car, first, you have to find out the total purchase price before tax. How to finance a car may seem like a no-brainer to you. But, the lower the cost of your car, the less of a loan payment you are going to have to repay–because the loan will be for less.

Secondly, find out the amount of cash you are willing to put down for the car. This is called a down payment. The higher your down payment–again, perhaps obviously–the lower your loan is going to be if this is an average car. Expect the amount of the loan to be higher if you buy a veryexpensive car, no matter how much money you put down–unless you practically pay off most of the car with a huge down payment.

Third, figure out the term of the loan in months. Car loan rates vary, especially depending upon the length of the loan. For example, a car loan that you get with 72-month financing is going to have lower payments than a car loan that you would get with 36-month financing.

Fourth, find out the sales tax rate. Sales tax rates vary from state to state, but sales tax rates definitely affect car loan rates, so be sure that you want to find out your sales tax rate as soon as you possibly can. Sales tax rates are usually designated by county according to the state or province that you live in, so check with your local listings before deciding what kind of car loan to get.

Fifth, use a car loan payment calculator, and compare rates with other cars to get deals. If you see, for example, that you might get a lower monthly payment on a car loan that a credit union offers rather than a dealer, it might behoove you to take that offer instead.

There are several tips and tricks you can use to find your ideal car and finance it properly. Of course, the best advice for financing your car includes: finding out the total purchase price before tax; computing your down payment; figuring out the term of your loan in months; finding out the sales tax rate; and utilizing a car loan payment calculator.