It’s an exciting time when you are a first-time car buyer – but it can also come with high anxiety. Signing on the dotted line to take on the debt of a new car can feel like a huge financial weight. It’s not just about the payments every month; there can also be the fear that you won’t qualify for a loan at all. If you don’t know what your credit history is like, then you might be wondering how much you can afford – or if you can even afford a new car at all.
If you are a first-time finance-finder there are some tips that can not only increase the chances that you will be able to borrow money, but ways that you can decrease your interest rate and get into the car you want for the price you want. Knowing how to maneuver on dealership financing options, and which options are right for you, are the keys to driving away in the car that you want instead of the one that you are stuck with.
Before you go to the dealership, it is important to understand how financing a car changes the overall price that you pay. The sticker price is only half of the story. Financing rates will determine how much you end up paying when all is said and done. If you don’t know how to negotiate, you might still get the car you want and the monthly payments you can afford, but you can end up paying more than the car is worth.
These are the things that you must know before you head out to the Nissan dealership to finance a car:
Know what your credit score is ahead of time
Many companies will now give you a look at your credit history and score for free. The higher your score is, the more likely you are to get a loan with a lower interest rate. Your credit score is a number that indicates how much risk you pose to lenders. The higher the score, the lower the risk you represent to cars for sale in Richmond. Before you finance a car, it is important to know what your score is. If it is really low, you might want to wait on purchasing a car for a couple of months while you build up your credit score. That will make it more likely that you can get the financing you want, and it will also get you a lower rate so you end up paying less over time.
Check out other options before you go
Before you go to the dealership, make sure that you look around at other banking institutions to see what type of loans and interest rates they have to offer you. If you have a traditional banking account and are established at a bank, find out how much they would be willing to lend you, and at what rate, so you know what your additional options are before you hit the dealership.
Don’t let your term rate grow to lower your monthly rates
Don’t tell the dealership how much you have to spend monthly. When you figure out which car and loan you want depending on how much you can pay per month, you will inevitably end up paying more than you should. Dealerships will try to extend your loan repayment term or use other tricks to make the financing “fit” your budget, instead of decreasing the car price to get you to drive away in it.
Put in a down payment
If you don’t have a down payment or a car to trade in, then you might want to wait a while and save up some money before you try to finance a car. Ideally, you should put down 20%. If you can do that, your interest rate will decrease and your overall payments will be lower. Since you are going to have to finance less, you will end up paying less when you pay the car off, too.
Buying a car is very exciting, but it is also a huge responsibility for newbies just starting out. If you haven’t ever financed a car before, it is important to know what your credit score is, have some money to put down, and have a set price that you want to pay instead of a monthly budget to stick to. If you keep a smart head, negotiate effectively, and don’t make an impulse buy, financing a car can be a lot less of a financial risk.