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After your house, the car is probably
the next most expensive item you will buy. Most people
cannot afford to pay cash for a new car so you will
need some form of financing to get that car of your
dreams. Although it seems boring, shopping for a good
finance package will really pay off in the long run and
could save you a packet of money.
Your first consideration will be the amount you
can comfortably pay off each month. So many of the
car repressions are done because the person went
for the absolute maximum so that they could get an
impressive set of wheels, only to have a problem
and be unable to keep up the repayments.
Once you know this, you should be able to
workout what model you can afford, whether you pay
over three years or more. Financing a car is easier
than getting a mortgage, providing you have a good
credit rating. You bank is the first place to try,
they will usually have a good deal as you have a
good history with them and it will give you an idea
of the APR (Annual Percentage Rate) that you can
expect to pay.
With this figure in mind, you can try other
banks or building societies and other finance
houses to see what rates they have on offer.
Remember to see if they are offering a fixed rate
for the entire length of the loan as you do not
want any nasty surprises 18 months down the
line.
Now you are ready to look for a car. You will
already have looked for the cheapest price
available for the model you want so don't let the
salesman bamboozle you into a more expensive model.
If anything, try to get him to drop the price or at
least give you something extra. They will usually
be more accommodating at the end of the month when
they need to make their sales target.
Even though you will have your financing in
place, it doesn't do any harm to see what the
manufacturer can offer. They will often have an
interest free deal that could look good but make
sure you read the small print. These deals may
require you to always have your car serviced at a
main dealer which could turn out more expensive in
the long run.
Car financing need not be a problem, you just
need to be thorough and careful, after all it is
your money and you don't want to waste it.
Car Financing by Ian Richards
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