Short Term Loans as Down Payments for Cars
Dealerships offer savings, but you can save even more
Many people are using short term loans as down payments to purchase cars. In today’s economy car dealerships are bending over backwards to make sales. The recession caused dealerships to lose millions of dollars in sales and some even had to close down.
The good news is that car inventories are still high and finding a deal is pretty easy. However, even though dealerships may be offering genuine savings, the bottom line is unchanged. They still want to walk away with as much money as they can. The true key to saving money when purchasing a new car is to watch for the little extras that can add up quickly.
Tips to make the most of a car sale
1. Sell your old car rather than trade it in. Dealerships will almost always take an old car off a customer’s hands, but getting what it’s worth is not likely. Car.com recently released a survey showing that, on average, people netted $725 to $1,125 more by selling their cars themselves, rather than trading them in to dealers.
2. Get financing before visiting dealers. A dealer can usually find financing for every customer, but it may not be the best offer around. Get a preapproval online at a place like Cardealexpert.com before you go to a dealer. Sometimes credit unions offer reasonable deal for members, too. Finding a way to finance a car before ever going to a dealership is the best way to save.
3. Save up a 20% down payment. A good down payment can greatly alter the future payments. This is where using short term loans can come into play. You’re likely to get a better rate with a larger down payment, which can make your monthly payments easier to manage.
4. Cut back on extras. Dealers will offer tons of extras when you’re negotiating about a car. Warranties, weather coating, and rugs are all extras, and they all cost more money. Cut them out to save more. You can generally obtain and extended warranty even after you’ve had your car for a while, so consider waiting to get an extended warranty until later on, when you have a better feel for what kinds of issues the car may have.
5. Listen to people you trust. Ask family and friends about dealerships they have worked with and go there first. Sometimes the best way to find a problem-free transaction is to go to the location with the best reputation. It means they have already served a wide variety of customers and given excellent care.
Get the best possible deal
Buying a new car is exciting, there’s no denying it, and using short term loans to finance the down payment has never been easier. The goal is to muster the best down payment you can in order to get the best possible interest rate and the lowest monthly payment. The keys to finding the best deal are to be prepared, get prequalified for a loan, and do some research.