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5 Tricks for Saving Money on Your Next Car Loan

Most likely, whenever the time comes to purchase a new car, you will not buy the first car you look at. You’ll look around to find the best deal you can get. You should also explore car loan options. Before you begin shopping for a new car, you can take steps toward finding the most financially feasible loan for you.

Build Your Credit Score

When you plan to buy a car, one of the first things you should do is find out what your credit score is. An excellent credit score number falls within the range of 781-850. A good credit score number would be between 661 and 780. In general, the higher your credit score, the better interest rate you can get on a loan. If your score is not good, it’s best to delay purchasing a car if you possibly can. Boosting your credit score takes time, but each step you take to improve your score will be beneficial to you.

Explore Your Loan Options

When looking for a car, you’ll probably visit several dealerships searching for the car that best fits your need. You should also look into your loan options. Visit your bank to see what type of interest rate they have on car loans. You can also check with various financial organizations that offer car loans to see what their rates and payment plans are.

Negotiation

It would be a rare occurrence if you purchased a car without some negotiation between you and the dealer. In addition to negotiating, the price of the car, you should also see what type of loan payment the dealership can get for you. They have connections with multiple finance companies and can explore their different rates, conditions and payment options to help you get the best interest rate possible.

Down Payment

It’s a no-brainer that the larger your down payment is the less money you have to borrow to buy a car. As previously mentioned, it is sometimes in your best financial interest to delay buying a car until you have taken steps to reduce high loan payments. Setting a personal goal of saving a specific amount of money for a down payment before buying a car can save you a lot of money in the long run. You could combine a money-saving plan with your plan to boost your credit score so that when you are ready to buy a car, you’ll be in a much better financial position.

Every Little Bit Helps

A simple way to save money on a car loan is to pay a little extra on the loan each month. You can set an amount that you can add to the basic loan payment. A process called rounding up is a good way to save money on a loan. An example of rounding up would be if your payment was $276.00 you could pay $300.00 each month to expedite the payoff on the loan.

You can often save yourself some money by planning ahead before buying a car. Impulse purchases often cause buyer’s remorse. You want to be able to enjoy your new car rather than be stressed out because of high loan payments that could have been avoided with some pre-planning.

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Tags: car, loan

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