| buying a used car you can not only save thousands | | | | so high and car sales are low. |
| of dollars in depreciation, taxes and factory costs, | | | | Additionally, if you are able to wait until the end of a |
| but also wind up spending more on your financing. As | | | | month to buy from a dealer, you may have some |
| new car manufacturers lure buyers with 0% interest | | | | additional leverage with salesmen who are under |
| rates and no-money-down offers, it's hard to find a | | | | pressure to meet a monthly or quarterly quota. |
| better deal when you're purchasing a used vehicle. | | | | 3. Pay in Cash |
| If you're planning to buy a used car, keep reading for | | | | The best way to save on financing costs is to avoid |
| some financing tips that will save you money. | | | | financing and credit all together. If you can do it, pay |
| 1. Shop Around for a Better Rate | | | | in cash. |
| If you need to obtain financing for your used car | | | | Let's say you're buying a five-year-old Civic for about |
| purchase, try shopping around for the best rate. | | | | $10,000 - that can be saved up in a year at a rate of |
| While the dealership may often offer you a good | | | | about $833 per month or two years at $416 per |
| financing option, you should to check with your bank | | | | month. Rather than taking out a car loan, put that |
| and other lending institutions to see if they can do | | | | money in a high interest-yielding savings account and |
| better. | | | | you'll reach your goal even faster. |
| Other car financing options that may get you a | | | | 4. Pay it Off Fast |
| better rate include a line of credit, which can | | | | If you can afford to do it, the faster you pay off |
| sometimes be as low as 5%, or simply offer a | | | | your car, the less you pay in interest and financing |
| low-interest home equity line of credit loan from your | | | | costs. While it would be unwise to stretch your |
| lending institution. | | | | family budget too tight in an effort to pay off your |
| A slight drop in the interest rate can save hundreds - | | | | vehicle, you should avoid long-term financing that |
| sometimes thousands - of dollars over the life of the | | | | drags on for four or five years. |
| loan, so this is a worthwhile investigation. | | | | 5. Refinance Down the Road |
| 2. Be Ready to Walk | | | | Let's say you need a new used car this year but |
| If you're obtaining financing directly through the used | | | | you've just put money in the house, perhaps had a |
| car dealership and you're not happy with the offered | | | | baby, had a dip in your credit rating and money is |
| rate, be ready to politely walk away from the deal. | | | | tight. Well, you might accept a higher interest rate |
| Most dealerships would rather lower their interest | | | | now, but in a year - once things improve - you should |
| rate by a half point or full point than see a potential | | | | investigate the prospect of refinancing that loan with |
| sale walk through the exit door - especially in tough | | | | another lending institution that can offer you a lower |
| economic times like today when gasoline prices are | | | | interest rate. |