Posted on: 13 October 2020
If you are ready to purchase a used car, you will want to make sure you are prepared for the financing aspect of purchasing a new vehicle. When it comes to purchasing a used car, there are some financial aspects you need to consider beforehand.
Tip #1: Save Up for a Down Payment
First, you are going to want to make sure that you have saved up for a down payment. Most lenders will not consider working with you if you don't have any money for a down payment. It is a good idea to at least 20% of the purchase price of a new vehicle. For example, if you want to purchase a car that costs $10,000, you will want to save at least $2,000 for a down payment. This will help show the lender that you are financially responsible and help reduce the amount of money you have to finance.
Tip #2: Know What You Can Afford on a Monthly Basis
When it comes to a car loan, you need to know how much you want to borrow total, and what type of monthly payments you can afford.
For example, if you were not taking the interest into account, and you needed to borrow $8,000, with a 3-year loan, the payments would be around $223 a month, but with a 5-year loan, the payments would be around $134.
Knowing what you can afford monthly will allow you to understand what length of the loan and what type of interest you should negotiate for. You want to make sure you can afford to make the monthly loan payment expected of you.
Tip #3: Don't Overbuy
Next, when it comes to choosing the car you want, don't overbuy. It can be easy to be enticed by a top-of-the-line used car for sale with all the bells and whistles.
However, you need to consider what you need from a car. If you need a reliable and safe vehicle, and you don't need a bunch of tech features, choose a more affordable car. You don't have to pay a lot of money to get an excellent vehicle. Not overpaying will make your loan more affordable, which is always a plus.
When it comes to figuring out the financing for a used car purchase, be sure to save up money for the down payment and consider both what you can afford to pay total and every month. Don't overbuy; get a reliable car that meets your basic needs. Places like Schwieters Chevrolet of Cold Spring can help you find the car you need.Share