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Key Tips for Financing a Second Vehicle

Getting a second vehicle could strain your finances if you don’t plan ahead. Buyers who aren’t careful might end up with overwhelming monthly payments and skyrocketing insurance premiums. Here are a few simple tips that you can use to make this process affordable and stress-free.

Double-Check Your Current Loan

Before you even consider buying a second vehicle, you need to make sure that your current loan or lease is in good standing. Trying to qualify for a new loan with late payments on your credit report will be very difficult. Anything that can be classified as a derogatory mark on your record will negatively impact your chances of getting a future loan with a good interest rate.

Explore Trade in Options

There are a few different reasons why you might want to trade in your current vehicle and purchase two new cars are trucks. Many car dealerships offer great deals to buyers who trade in and purchase at the same time. You might even be offered a better lease or loan on a new car if your credit has improved over the last few years. Before deciding if you are going to trade in or not, you should also take a look at the total sales tax for each vehicle.

Combine Your Loans

One of the best ways to save money on multiple loans is to combine each open line of credit into a single loan. Most major lenders prefer to bundle loans because it will save them money on paperwork and they already have a good idea of the applicant’s reliability. Depending on which lender you work with, you might even be pre-approved for a larger loan if you agree to bundle the newest loan once you drive off the lot.

Negotiate New Insurance Rates

Another important variable that must be considered before heading to a car dealership like Bay Ridge Nissan is your new insurance costs. Much like your loans, bundling your insurance policies will most likely be much more affordable. Drivers who own homes should also consider contacting their mortgage company to see if they offer car insurance.
 

When to Consider Leasing

Deciding whether to buy or lease a second vehicle can be a somewhat complicated process. The two biggest factors to consider are your cash flow and the amount you have for a down payment. Once you are at the dealership, the salesperson will be able to give you exact numbers regarding the down payment and monthly expenses. Some leases also have stipulations such as how many miles you can drive each year.

The best way to save money on a new or used car is to start working on your finances a few months in advance. Building a good down payment and improving your credit score by just a few points might end up saving you thousands of dollars in the coming years.

Views: 42

Tags: finance

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