Car Finance – Choosing One without a Hitch

2007-03-08 10:33:40

( Automobiles )



Buying a car is a dream come true for most people. It can easily turn into a nightmare if you can’t meet your car payments. Here are some basic tips to help you prevent car finance troubles.

The first and most important thing to ask yourself is, how much can you really afford? You may come up with a figure from the top of your head but an exact calculation is a must. It is recommended that no more than 15% of your monthly net income should go to monthly car payments. Your net income is your pay after tax deductions or your take home pay. Working within this rule will ensure that you can comfortably cover your household automotive finance obligations.

Not sure whether to buy a brand new car or a used one? The value of new cars depreciates usually within the first 24 months of ownership so consider getting a brand new car if this does not concern you. Get a 1 year old or a 2 year old car if saving money is a priority.

When buying a new car, you would often be offered a cash rebate and sometimes you can choose to have a lower interest rate instead, depending on your car dealer. When making a choice, make a quick and careful comparison of your two options. Ask the exact amount of the cash rebate and then compare with how much you will save on your payments with the low interest rate.

Long-term car finance loans may give you more time to pay but the trouble with car payments that stretch over long periods of time is you end up paying significantly more than the worth of your car. Short-term car finance loans with a 36 or 48 month payment terms are ideal but make sure, of course, that you can afford the monthly payments.

Be informed, careful and realistic when making your decisions. Make your car buying experience something to remember and not something to regret.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.