Without a solid strategy to finance your new car purchase at the lowest possible rate, buying a new car can be a risky purchase. We’ve found several strategies to help you minimize your monthly repayments, any one of which may be best for your circumstances.
The better your credit score, the lower your interest rates will be. With the difference between a poor and excellent credit score impacting your repayments by up to $200 a month (or $6,535 over a 36-month loan!), it’s vital to get your credit score as high as possible before financing.
You have two options to improve your credit score. Either slowly build it over many years or quickly repair it by utilizing a credit repair service, such as CreditBear. If you want that car anytime soon, a good credit score is essential.
Repayment calculators are perfect if you’re curious about how down payments, loan terms, interest rates and other factors impact monthly payments. We suggest the FICO Loan Saving Calculator as a great place to see how improving your credit score can alter your repayment amounts.
Making a hefty down payment can immediately reduce your monthly payments and in turn, your interest repayments.
What is considered a hefty down payment? Experts suggest that 20 percent of the total amount is a good starting point. One way to quickly collect this money is to use your tax refund. Companies such as H&R Block and e-file are masters at helping you maximize your refund for free.
Car finance terms are typically three to four years. Although you pay off your debt quicker with a shorter loan, the monthly repayments are higher. By extending your loan term, your immediate repayments will be smaller and spread over a longer period.
It is important to know how you will be financing your purchase before setting foot on the dealer lot. Make sure to compare rates online, check out your local bank or credit union and speak to any financial institutions you already deal with a relationship with. Auto dealers sometimes have financing options available but these tend to be quite pricey.
Often it makes more financial sense to buy used. Although you don’t get that new car smell, the fact that used cars can be up to 80% cheaper means your monthly repayments will be significantly lower. Additionally, used car financing can be cheaper and easier to obtain if you’re struggling with new car financing.
When you’re ready to get your credit report summary, call the number below. You’ll get the summary and consultation free of charge, without an obligation to purchase anything.
Want more tips and tricks on how you can repair your credit? Check out our credit repair website.
The information on this page is not intended to be legal advice. Our participating providers will offer an individualized consultation to determine the right services and products for you, if any.
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