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Financing when buying a new car

For most of us, buying a new car involves borrowing most or all of the cost of the vehicle by accepting the financing that a dealership offers. Other new car buyers arrange financing through a local bank or credit union. Many people are financially prepared to buy a new car and pay for it outright themselves. Another popular option is to lease a new car. Although these choices have their individual benefits and downsides, depending on your financial situation, one may be just right for you.

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Car Loans From a Dealership

The easiest way to finance a new car is through the dealership where the car is purchased. If you have systematically researched individual dealerships for the best deal, and satisfy a dealer's "qualified buyer" requirements, you may be able to secure a loan at a low rate, and save money. Always be sure you have a clear idea of how much car you can afford, and what terms will meet your needs. New car loans can be configured for 30 to 72 months. While longer term loans usually offer lower interest rates, calculating the total interest for the life of the loan may be revealing.

Bank and Credit Union Car Loans

The best place to research and compare auto loans is on the Internet. Banks, credit unions, and other lending institutions offer comprehensive services online to assist you in comparing interest rate quotes. Equipped with calculators, links to loan resources, and methods of comparing loans, online lenders can make the process of researching a new car loan much more efficient and easy.

Researching New Car Loans

Whether you are purchasing your first new car, or are a seasoned veteran, the first rule of new car buying is to know your facts. Taking the time to compare rates and loan terms can save you hundreds or thousands of dollars. Spending the extra time to get the best deal can help you take a step up to a nicer vehicle. Make sure you do sufficient research to thoroughly know the playing field upon which the game of new car loans is played. You can't expect to win if you don't know the rules.

Leasing a New Car

Leasing a new car is particularly appealing for people who will keep a car only a few years before wanting to drive a new vehicle. They can always opt to purchase the vehicle when the lease expires, but leasing affords the ability to get a new car to drive every three or four years. The downside of obtaining a new car every few years is that you are spending the extra amount for the higher DMV and insurance fees. Five years of leasing is about more expensive than the first five years of ownership of a new car. This is not an issue if you require a new car in the driveway.

Save Money Buying a New Car

It may sound contradictory, but a person can save money when buying a new car. Rather than buying a car from the closest or most convenient dealership that stocks the vehicle you are looking for, you can save hundreds, if not thousands by shopping for a new car on the Internet. Researching interest rates can make a difference. Even a few tenths of a percent interest can mean hundreds of dollars over the life of theloan. Check for dealer discounts and cash back offers. Many lending institutions offer monetary incentives for making loan payments by automatic payroll deduction.


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