Car loans can get very expensive if you get a bad deal and that is why you should research the right lender and the right loan before making the decision to buy a car.
As experts seem to do with every topic, they auto skup don’t agree when it comes to car purchase budgeting. Taking into account all the differing views, the general consensus seems to be that the car payment should not cost more than ten percent of income. The costs are inclusive of fuel, insurance and maintenance.
Financing
After deciding on a price range, the next step is to decide to what extent the car should be financed in whole or in part through car loans. Buyers often opt for long repayment plans just to be able to lower the down payment. However, if a situation arises in which you want to trade in the car after just one year, the additional debt can even exceed the total value of the car.
This is not at all desirable. To avoid this possibility, a useful and quick rule to follow is to always fund less than 80 percent of the retailer’s actual cost or bill. The remaining 20 percent should be paid in either cash or equity that you can get from trading an old vehicle you own.
Dealers are good at selling cars, not loans
All too often you hear about fraud when buying a car. Therefore, you should be careful when buying a car. You may be suspicious of used vehicle dealers, preferring to shop around for the best value and integrity. The same level of caution is required with car loan agreements for car purchases. The usual procedure is for the dealer to refer the buyer to the company’s finance department to work out an auto loan agreement.
Dealers usually offer more flexible credit requests than banks and sometimes push cheap financing offers. These car loan options may seem attractive with a 3 percent interest rate, but they may only apply to certain car models or short-term car loans. Caution should also be exercised for dealers selling auto loan options as they tend to make large profits on the financing, regardless of whether it is the vehicle’s manufacturer or not.
Double negotiation
When buying a car, always make sure to negotiate the price of the vehicle before renting it if you want to finance the cost of the car. Dealers may also skup aut try to confuse you with lower financing rates for higher-priced vehicles, or offer a car at a lower price but with a higher financing rate.
It is perfectly acceptable to negotiate better car loans as dealers tend to involve a number of different credit sources including the manufacturer’s credit company and local banks. Each of them can offer different prices to the trader. Therefore, it’s always better to explore your options for auto loan installments and other financing options, rather than buying a and then setting the rate with the dealers.
Closing the deal – What to expect when you close your used car purchase
Congratulations! You’ve found the of your dreams – it runs well, has a clean history and rev check – and best of all, it comes at a great price! When you’re one of the lucky few who’ve found the perfect vehicle, you want to close the deal quickly and get your hands on the keys.
Here’s what you can expect in the final stages of buying a used :
Purchase from dealer:
After you have agreed on the price for your used purchase, the dealer prepares the sales documents. Always make sure to read the fine print before signing. Ask any questions you have about the warranty – dealer warranties tend to be a lot more complex than a manufacturer warranty and you want to be sure you understand the terms. In Australia most used cars bought from an authorized dealer should have a 3 month or 5000km legal guarantee – you will know because they come with a Form 4. You should also note and understand the following:
- Confirm your delivery date in writing – a used should be ready for collection relatively quickly. Make an appointment within 2 weeks and get it in writing.
- Do not pay the balance until you pick up the vehicle and hand over the keys. It can be worth clarifying whether the down payment is an inventory deposit or a purchase deposit. A purchase deposit involves signing the official purchase contract, which is legally binding.