| The best way to buy a car is to pay with cash, | | | | Low cost financing may require a sizable down |
| but almost two-thirds of all new-car buyers need | | | | payment and a short-term loan. |
| financing for at least part of the car's cost. You | | | | Typically, the finance person at the dealership will |
| can get a loan from a bank, credit union, savings | | | | try to sell you credit insurance, a policy that pays |
| and loan, or a loan company. Most dealerships will | | | | off your loan if you die or become disabled. Many |
| also offer some sort of financing. | | | | people already have insurance polices that cover |
| Regardless of where you get a loan, if you can, | | | | death and disability, or just can't afford the extra |
| you should put down the largest down payment | | | | cost. When a customer buys credit insurance, the |
| you can afford and aim for the shortest payment | | | | cost is added to the cost of the car so the buyer |
| period. The difference in total interest payments | | | | ends up paying interest on the insurance premium. |
| between a three-year loan and a five-year loan | | | | What is the biggest new car financing mistake |
| can be substantial. It's always a good idea to talk | | | | made by buyers? Trying to buy a new car |
| to someone at a bank or credit union before you | | | | without checking online auto loan rates or knowing |
| buy a car in order to get some idea of what your | | | | if their credit history can support getting an auto |
| car payments will be. | | | | loan. Many problems stem from buyers who see |
| Special low financing rates offered by a dealer can | | | | the 0% APR ads, but cannot get the cheap auto |
| be a good deal or can be deceptively low. Here | | | | loan rates since they are unaware of their low |
| are a few things to watch out for if you are | | | | credit score. |
| considering financing your car through a dealer: | | | | Take the time to do a thorough research on the |
| Sometimes the very low advertised rates apply | | | | web about online auto shops and car sale pricing - |
| only to specific cars or models and the dealer | | | | many can get you competitive price quotes, car |
| may not be willing to negotiate on the purchase | | | | pricing, dealer cost and rebates. |
| price for those cars. | | | | |