Car Financing Tips To Know When You’re Buying A Car

Posted on 11. Jan, 2009 by Frank in cars

The leading provider of new- and used-vehicle information, Kelley Blue Book www.kbb.com, announced the all-new 2009 model-year vehicle winners of its annual Best Resale Value Awards, which recognize current and upcoming vehicles for their projected retained value five years from now (the average ownership period).Vehicle shoppers should take several factors into consideration when buying a new car to ensure as much future value as possible. First, car-buyers should choose a popular exterior color such as silver or black. Then, car-buyers should choose optional equipment that is customary for the type of vehicle they are buying. Equipment and options that are popular with used-vehicle buyers include antilock brakes (ABS), alloy wheels, audio system with MP3/iPod compatibility, power-operated leather-covered seats, cruise control, remote locking and navigation system. Car-buyers should also recognize that the cost of some

potentially expensive features like premium audio systems will be difficult to recover at trade-in or resale time.”Especially in today’s tough market and difficult economy, consumers really need to take a hard look at the projected resale value of a car when choosing their next new vehicle purchase,” said Jack R. Nerad, executive editorial director and executive market analyst with Kelley Blue Book’s kbb.com. “Choosing makes, models and options wisely now can help new-car shoppers keep additional money in their pocket down the road when they go to sell or trade inthe vehicle used.”
car financing is a complicated subject. It seems that everyone has a different opinion on the best methods or strategies for financing such a large purchase should be. It can be hard to know how big a monthly payment is too big, how much of a down payment is too small, and where in between the sweet spot lies for most car buyers.
A common mistake when financing a caris to look at the size of the monthly payment instead of the actual cost of the car itself. It can be tempting to go for a car that has more luxury features or a bigger engine simply because it is offered with a monthly price that you can afford. This kind of payment focus can lead you to overspend your budget by a huge amount – sometimes five to ten thousand dollars more than you initially intended to pay.Dealers tend to encourage monthly-payment oriented thinking because from their perspective, the longer you are making payments on your car, the more money they can make from administrative fees and interest. Instead of taking 3 years to pay off your car, you might now be looking at 5 years and close to double the amount of interest paid.
It’s also important to take a close look at the details of any payment plan that is offered to you to make sure that the terms, interest rate and period are competitive with that which you could get from your bank. Sitting down with a calculator and determining the real cost components of any monthly payment plan you have been offered will give you the real picture of exactly where your money is going.Down payments are another gray area. There are those who recommend making the largest down payment that you can afford on your vehicle – typically around 20 percent, although some say as much as half – in order to avoid the interest costs associated with financing. However, an equally vocal contingent will warn buyers against making any cash down payment at all before a deal is inked. In some cases, if dealers walk away from the bargaining table they can take your down payment with them if a contract hasn’t been signed. If you must make a down payment or deposit on a car to get priority at a dealership, try doing it with a credit card so you can get your money back if things turn sour.
With all of these warnings, caveats and traps to look out for, it can sometimes make it seem like car financing is a complete nightmare. That doesn’t have to be the case. As long as a buyer is completely informed about what is happening with regards to their financing, and as long as the negotiation process, fees and interest rates are completely transparent and spelled out on paper, then there is no reason to fear financing this major purchase. Financing can help you manage your cash flow and keep you from tying up all of your resources in a single asset – making sure you will be prepared to deal with any unexpected financial issues that life may throw at you. No one wants to have to sell their car due to hardship, and with the right financing, it doesn’t have to happen.

Buying a car is an investment. That’s a fact. Now, when you purchase new cars, you will see that most brand new cars will come with some sort of warranty that is offered by the auto dealer or the factory that manufactured the car. Usually, most limited warranties that are provided will usually last up to five or even seven years. This means that it will last for up to 50,000 miles.Some factories will even provide you with a ten year or 100,000 mile limited warranty for the car you purchased. After the warranty expires, you will be the one responsible for paying for the cost of maintenance and decoration: underline;” href=”repairs/repairs.php” title=”Repairs”>repairs to the vehicle. If you are like many people, you wouldn’t want to spend hundreds or even thousands of dollars on repairs and maintenance to your car. If so, then you will want to get an extended warranty for your vehicle.It is important for you to know how to compare the different extended auto warranty plans. Comparing warranty plans can be difficult because of the number of companies providing them and the differences between their plans. Usually, what most car dealerships will do is subcontract their extended warranty policies to other companies that offer warranty. This will mean extra fees for the extended auto warranty.Of course, you want to get a cheaper extended auto warranty. Besides, you wouldn’t want to pay for something that you can get for less, would you? As much as possible, try getting the extended auto warranty from companies that directly offers this kind of warranty. Doing this will help you compare plans.
Now that you know how to choose an extended warranty, the next question would be if it is worth the price. The answer will depend on how you use your new car. If you just do light to moderate driving, an extended warranty will not be needed. Extended warranties can really come in handy if you drive the car heavily and abuse it.Getting an extended vehicle warranty will give you peace of mind with your vehicle purchase. This can really save you in the long run.Remember these tips and you can be sure that you will be able to get an extended auto warranty that will be worth every penny. Your automobile is an investment.