Buying a car requires you to be very knowledgeable particularly if you're intending on using a load to buy it. A car is a necessity in this current age, and it's a no brainer that you need to get one to get by. However, these ingenious creations can eat up your wealth and may carry a lot of expenses if you're not careful. So before getting that set of wheels you really desire, tread cautiously. A minute mistake may keep you from realising your financial goals by draining thousands from your pocket. So here are some common mistakes that you need to stay away from.
Failing to go local
When you are looking to finance your car, start locally. Head to your credit union, because you'll have a higher probability of getting better deals. You'll also be in a much better position of getting an auto finance loan in the bank where you hold your checking account even when your credit score doesn't look so good. Besides, having a bad credit doesn't automatically prevent you from getting car loans. Every lender has different criteria when it comes to categorising credit scores. You may be in a better position to get a loan with your tarnished credit score than someone with a similar score but no credit history.
Assuming the worst
If you've got a bad credit history, then simply look around for a known lender that would see the positive side of your credit score. Don't assume the worst. Auto loans involve less money over shorter time frames, so your credit score may give you a better loan that you think.
Don't go for add-ons
One of the best ways to keep your finances in check is to say no to add-ons. These are the extra items such as extended warranties that are added on to the cost of the car. They increase your interest rates and are not worth including in your car loan. You'll be much better off purchasing such add-ons separately.
Choosing long-term loans
One of the biggest mistakes you can make is looking at the monthly installments as opposed to the overall deal. While it may seem convenient to pay only tiny amounts over a long period of time, it's worth noting that cars depreciate substantially over the years. You'll eventually be paying a lot of interest for a car with less value. In fact, you may even owe more money than its actual market value after some years. You could decide on making a larger down payment to reduce the time taken to pay the loan.Share