Is it Better To Get a Car Rebate or Low Interest For the Car Loan

Low interest! Car rebates! Cashback! Year end deals! The holiday season is in full swing now, so why shouldn’t the car dealerships get together to figure out how to part you from your money? It’s only natural — they’re going to want to make absolutely sure that they are able to get you in the door with enticing offers. If you have good credit, you’re going to be able to get a lot farther than someone with challenged credit. And these days, getting into a new car is easier as dealers realize that sometimes it’s better to accept someone with a little more credit risk than end up losing the sale just because they couldn’t pull financing. If you have a good down payment you might be able to get into something really nice — you just never know until you find out.

However, before you can actually get too excited about the prospect of getting a new car, you’ve got to answer that pesky problem of financing. You need to figure out whether you should go with the car rebate or with the low interest loan. In a perfect world, you would get both. But this is capitalism at its finest — you’re going to have to pick one in exchange for the dealer giving you a bit of a break. It’s only fair, you know.

Well, in order to figure out which choice actually makes the most sense, you’re going to need to do some break even calculations. We’re going to provide a small example here to show you what we mean:

We are going to assume that you are purchasing a vehicle that offers 2.8 percent financing or $2,000 cash back — the car is $20,000 dollars. To avoid problems creeping in, let’s assume that there is no tax to deal with. We have to figure that the cash back will be pulled into part of the loan for comparison purpose. This means that you’re going to have $22,000 to finance at an average term of 48 months. This will be at 2.8 percent, which gives you a payment of around $485.01 every month. That’s quite a bit of money, but hey — welcome to the world of financing a car, enjoy your stay right?

Right. Well, if you could go to your bank for the financing, you’re going to have to fork out a lot more in terms of interest rates. The average bank loan is about 7 percent — and that’s if you have decent credit. We don’t even want to get into what’s going to happen to you if you don’t have good credit, you know what we mean? It’s definitely a squeeze!

If you go to the bank, you don’t have the cash back — so it’s just the $20,000 that we’re trying to finance. $20,000 financed at 48 months at 7 percent is going to be $478.92. That’s not that much difference — and you might have a better relationship with your bank, to the point where you can work out even better refinancing down the road as long as you prove that you can handle the car payments.

The cost of borrowing comes into play when it comes to understanding why the low interest rate offer is actually a worse deal than the bank offer. You have to add the $2,000 back into the cost of borrowing on top of the interest ($1,280.48 if you’re not playing along with your calculator)

Of course, we’re going about all of this the long way. If you really want to make sure that you know what’s going on you might want to just use an online calculator that lets you break down both offers and tell you which would be better. There’s actually quite a few, and a quick web search will provide you with more links than you can shake a low interest rate offer at — we promise! Good luck out there and make sure that you are always looking at the bigger picture rather than just taking the offer that looks shiny! Start today!


There’s Every Reason in the World to Apply Online for a Car Loan!

The thrill of a new car can be hard to beat. Even if it’s not a completely new car, let’s face it — it’s new to you, so it still counts, right? You’re still going to be excited to drive it, and you’re still going to protect it well. However, if you’re not excited right now, it’s probably because it’s also dawned on you that if you really want to get a new car, then you will need to make sure that you get a car loan. In a perfect world, everyone would just have the extra cash to spare to get a car without getting a loan, but this world is far from perfect. Even if you do have the spare cash to get a car, you might want to save that for a rainy day and still get the loan anyway. It just depends on what you really want to accomplish.

The good news that you need to hear right here, right now is that there’s really every reason in the world to get a car loan right now. Now, if you’ve been watching the news you might feel that the world is just too uncertain to get a car loan right now. Yet there are a few flaws to that argument.

First and foremost, the truth is that every economy is uncertain. Even in good times, we don’t know when things are going to get sour. In fact, it’s in down economies where a lot of great deals are. If you have the ability to get a car loan and you know that you can afford the payments, there will be a lender that’s willing to work with you. From the lender’s point of view, it would be better to get a customer that can pay back the loan than not get a customer at all. If this means that they have to be a bit more flexible in the requirements, then so be it.

From there, you have to also think about the fact that cars cost the dealership money for every month that they sit on the lot. So if you’re thinking about securing dealer financing, then you can definitely get that too. Again, the dealers know that people aren’t going to have perfect credit, but they need those cars gone. If you’re excited about getting a new car, then you will just need to make sure that you let them know that you’re willing to make a deal. Even if you have to accept a higher interest rate, then it’s worth that to get a car — especially if you really need one!

Overall, it’s a great time to get a car loan, especially when you think about all of the deals that are available online and offline — what will you get? There’s only one way to find out, and that’s to get started today! You’ll definitely be glad you did!


Think You Don’t Qualify For a Car Loan – Think Again!

Dreaming about a new car? A lot of people all over the country want to get their hands on a new car. Their reasons vary. For some, getting a new car means that they will finally be able to achieve a higher level of independence. On the other hand, some people want to get a new car because their old car is really on its last legs. There’s no reason to live in fear of getting stranded on the road and not being able to actually get anything accomplished.

Yet if you’ve just tried to apply for a car loan and gotten denied, you can really start feeling like the world’s against you. After all, if everyone else around you seems to be able to qualify for a car loan and you can’t, you might think that it really has to b that way. The good news is that it really doesn’t have to be this way at all. Indeed, if you really think you can’t get a car loan, it’s time that you really rethought that mentality in a serious manner.

You see, most lenders realize that people cannot get cars without car financing. Car financing is a source of income for them. The riskier you are credit wise means that they will be able to charge you some extra interest when compared to their “top” customers who have better credit scores and close to flawless credit history. Someone with a credit score of 775 isn’t going to have to worry about car loan rates the way someone with a credit score of 520 would have to.

If you’re the person with the 520 credit score (or something close to it) you might think that such a low credit score means that there’s no way any lender is going to give you a loan. But this isn’t the case anymore — lenders are realizing that there are a lot of great people that just have some credit issues that they need to work out.

No, the new measuring tool isn’t credit history, but actual income. If you have stable employment, then lenders will feel more comfortable lending to you because you can at least pay it back. Unlike other types of loans, lenders know that you will not risk having your car repossessed, and if that means that you might have to skip another bill, you will definitely do so.

If you’re ready to apply for a car loan, you might think that your next step is to go to the dealership. However, this really isn’t the case either. You will actually want to make sure that you go online for a car loan. This will let you actually force the lenders to compete for your business and give you a good car on your next car loan.

If you’re trying to rebuild your credit, you’ll actually find this is a great way to do that. Not only will you get a great car loan and a great car, but you’ll also be able to lift your credit score by making good payments over time — what could really be better than that? Make sure that you apply online for your next car loan today!


Car Loans

Not many people can buy a car straight off the lot, but acting like you can gives you a better bargaining position when you purchase a used car from a dealer. Take this into account by getting a loan from a financial institution separate from the dealership instead of the financial institution found in the dealership. It is a better idea to get a financing option from a lending company instead of working out a loan through the car dealership. If you get your car loans through the dealership you can often be fleeced for numerous added charges and your monthly payments will be marked up as well.

Having your car loans done through a bank or other lending company will put you into the consideration of a cash buyer through the dealership as you will be buying the car outright instead of in installments. This kind of freedom is nice because you can purchase your car and whatever other accoutrements that might come with it for your car loan and not have to worry about payments to the dealership. They won’t try to over sell you anything because you will have only a set amount of money to spend and nothing more.

This kind of payment will also increase your credit score because you are proving you have the ability to be frugal and smart with your money. This is primarily because your credit report will show the transaction of the car since it is a major purchase and the fact that you don’t owe the dealership anything. Being square in the eyes of the credit companies is your best option when considering future purchases. Your score could take a beating though if you don’t pay off the lending company in a timely manner.

Paying off your car loan is not a tricky business really if you get your loan through a lending company. Car loans through a lending company will accrue interest just like loans from anywhere else. You will have to pay these loans back in a set amount of time and if you are unable the car can be repossessed.

If you are well off enough, you can reduce your interest by putting extra payments against the principle (the initial amount lent to you). Reducing your interest is a great way to lessen your monthly payments while sticking to your intended schedule of payment. Staying up on your payments is another great way to keep future car loans in good standing.