Watchouts in Automobile Loans

2007-03-08 10:33:40

( Financial )



Getting a new car is always exciting but you should be financially prepared before and after getting the car. You can purchase the car by paying cash in full, or you can also avail of any of the automobile loans being offered in the market today.

You can get automobile loans from any bank, lending institution or credit union. Credit unions usually offer lower interest rates than banks or lending organizations. You can get you loan approved even before you step into the manufacturer’s showroom which can be a clear advantage for you.

The general rule of thumb is to know your numbers. There are a lot of auto loan offers out there that boast low interest rates or no down payment. But interest rates and down payments are not the only aspects you should consider when getting automobile loans.

The only way you can be assured that you are getting the best deal available is to do your research. Compare rates with other dealers. Go to several dealers and compare their offers. One dealer may be offering a very low interest rate but requires a hefty down payment. Another dealer may offer just the opposite – no money down but with a higher interest rate. Do your math and look at the total cost for both.

If you are deciding between a new car and a used one, you may also want to consider the cars resale value. The resale value of a used car will be significantly lower than that of a new one. Interest rates on a used car are also much higher. In some cases, buying a new car is cheaper than buying a second hand car. You should also check the auto refinance rates of the particular car you are buying if you are considering refinancing at a future date.


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