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.