| Buying a car can be a confusing process. You may be offered low-interest financing as an incentive to buy a car. In exchange for this low-interest financing, you may wind up paying more for the car. If the dealer gives you the choice of better discount on a car or a lower interest rate, compare the monthly payments between those two options. You should also compare the dealer’s financing terms with those offered by a bank or credit union.
Car loans might be as long as ten years. The longer the loan, the more interest you pay. You may also find yourself with an aging vehicle that needs repairs and years left to pay on your car loan.
Find out how the interest on your car loan is calculated. The formula may cause you to pay much more interest in the early years of the loan. In addition, watch out for pre-payment penalties if you pay the loan off early.
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