Everything You Need to Know About Financing a Car

Buying a set of wheels is one of those milestones in life that everybody wants to put behind. That’s okay, but it’s also the point where most people make financial mistakes that will haunt them for a long time.

Ideally, your experience with a new car boils down to how you intend to pay for it. Saving up is one way, and it’s the cheapest option out there, but it takes a painfully long time. Fortunately, you can opt for financing and pay up in sizable monthly installments. So here are the best options.

Direct loan

Where do you save most of your money? If it’s a credit union, you have a better chance of securing a cheap loan and driving off in a brand new set of wheels in no time. All you have to do is clear any outstanding debts and inform them of your plans.

Alternatively, it wouldn’t hurt to ask your bank about the same. If your relationship is healthy, they might be your best option. But the idea here is to get the lowest interest rate possible. That way, you will not have to pay too much in interest fees.

Dealer loan

When you have no other options left and still want that car (badly), this is your last and only option. Here, the dealer stands between you and the lender – a thing that makes the loan somewhat expensive, but hey, it works for people with bad credit. The secret to managing this type of loan is paying as much deposit as you can – or at least 20% of the car’s value. That should cover any taxes, fees, and other additional costs associated with the purchase.

But overall, try to buy a car with cash, it is the only option that truly works in the long run. And in case of anything, you can sell it – no questions asked.