Dollars And Driveways: Understanding Auto Finance


For those of us looking to get a new car, or upgrade our current vehicle, understanding auto finance can be a daunting task. It’s important to factor in everything from sales tax to insurance costs, Each dollar that goes into your new vehicle demands smart analysis. Before you start shopping for cars, here are a few crucial points you should consider when it comes to auto finance.

Calculate Your Budget

Before you head out to a dealership or shop online, make sure you have a realistic budget in mind. Determine what you can realistically afford to spend each month for car payments and other costs associated with car ownership. Use an online calculator or contact a financial advisor to help you get a better understanding of your budget.

Research Prices

Knowledge is power when it comes to auto financing. Research the type of car you’re interested in and compare different makes and models to get a good idea of what the market has to offer. How much is the car you want or need going for? Knowing the going rate will give you leverage when discussing financing options with the dealer or other lender.

Get Pre-Approved

Before you visit the dealership, it’s wise to get pre-approved for financing. This will help you know what you can afford to buy. Additionally, you can take the offer from the lender and use it to negotiate with the dealer. Getting pre-approved can take the guesswork out of auto financing and make sure you don’t end up paying more than you planned.

Check for Incentives

Most car dealerships have financing incentives such as zero percent financing or cash back. Make sure to keep an eye out for these offers so you don’t miss out on potential savings. You can also look for discounts, such as the discount for veterans. Some dealers may even be willing to negotiate prices for buyers with higher credit scores.

Shop Around

When it comes to auto finance, don’t settle for the first offer you get. Shop around at different dealerships and lenders to get a sense of the market and look for the best deals. You could save hundreds or thousands of dollars by doing a bit of research and comparing lenders.

Know Your Alternatives

Another option to consider is leasing a car rather than buying one. Leasing can be a good deal if you don’t plan to keep the car for a long time. If you have bad credit, you may need to use a cosigner when applying for a loan. Knowing your alternatives can help make sure you’re getting the best deal on your auto finance.

Stay Informed

Lastly, stay informed when it comes to auto finance. Read up on the latest news and trends in the industry and keep an eye out for changes in lending rates or incentives. Being informed will help you make the best decision for your own unique financial situation.

Auto finance doesn’t have to be complicated. With the right preparation and research, you can make sure you’re getting the best deal on your new car.