| -> | | | | power to get you to finance the car through the |
| So that bucket of bolts you drove throughout | | | | dealership. Auto financing is a big money industry, |
| high school and college has gasped its last | | | | and car manufacturers would be remiss to not |
| exhaust-filled breath. It's done. That means you're | | | | take advantage of it. Financing with the dealership |
| in the market for a new car. Soon you'll brave the | | | | is tempting, as it's the quickest way for you to |
| treacherous world of the car lot. Be careful, it's a | | | | drive off the lot in your new set of wheels. |
| jungle out there. Eager salesmen hover like | | | | But buyer beware, dealers know that buying a |
| vultures, ready and willing to separate you from | | | | car can be a mentally exhausting experience, and |
| your hard-earned cash. | | | | finance departments will often add hidden fees in |
| Once you decide on a car, you'll then have to | | | | the paperwork for services or features you don't |
| survive the depths of the dealership, where | | | | want (e.g., extended warranties, service |
| finance managers lurk at every corner--pen and | | | | agreements, etc.). Dealerships also offer attractive |
| paper in hand, waiting for you to sign on the | | | | financing deals like rebates or low interest rates, |
| dotted line. But don't worry, with a little prior | | | | but many of them depend on your credit |
| planning, you can get that new car without | | | | score--which you should always know before you |
| breaking the bank. | | | | even step foot on the lot. You can check your |
| First off, you need to make a decision: buy or | | | | credit score and correct any errors by visiting or |
| lease? If you like to drive a car until it dies--and | | | | If you want to be a truly empowered car buyer, |
| with today's autos running well past the 100,000 | | | | then secure a loan through a bank, credit union or |
| mile mark--then you'll probably want to buy. | | | | other lending institution before you buy. You'll |
| However, if you see yourself in a different ride | | | | generally get a lower interest rate than what the |
| every couple of years, then leasing might be the | | | | dealership can offer you, and you'll essentially |
| right option for you. In a lease, you're essentially | | | | become a "cash buyer". This means you'll have |
| renting the car for a pre-determined amount of | | | | more negotiating power on the total price of the |
| time (usually three years). During that time, you'll | | | | vehicle, lower monthly rates, and no chance of |
| have to keep the car in tip-top shape and only | | | | the dealerships finance department sneaking in |
| drive it for an agreed-upon amount of miles per | | | | any hidden fees into a finance contract. Most |
| year (usually around 15,000). After your lease is | | | | lending institutions, upon approving your loan, will |
| up, you can purchase the car at a residual price or | | | | give you a check that can be made out to a |
| start a lease on another car. | | | | dealership. Negotiate the price of the car along |
| Once you decide on buying or leasing, it's time to | | | | with tax and licensing fees, and off you go. |
| figure out how you're going to pay for it. First, | | | | Whether you lease or buy, finance through the |
| decide how much you can afford to spend on a | | | | dealer or through a separate lending entity, |
| new car. As a good rule of thumb, many experts | | | | always read every contract that requires your |
| suggest that you spend no more than 20 percent | | | | signature thoroughly. Make sure the figures in the |
| of your net income per month on a car payment | | | | contract are correct and that you understand all |
| and other related auto-expenses. | | | | of the charges included. Also, if at any time you |
| Next, decide how you want to pay for it. Once | | | | should feel pressured by a car salesman or lending |
| you're on the lot and fall in love with your dream | | | | agency, walk away. Remember, you are the |
| car, the salesperson will do everything in their | | | | buyer, therefore you have the power. |