| Ahhhh, that new car smell...It's great isn't it? But it | | | | on an average priced new vehicle, over the life of |
| comes at a premium. We all know that it's | | | | the loan.My advice on this would be to go after |
| cheaper to buy used instead of new, but if you | | | | those low APR loan offers that the dealerships |
| still don't think you can live without that fragrance | | | | sometimes have. You know, the "buy now and |
| of a new car (the real one, not the one you buy | | | | receive 2.9% apr for up to 60 months" type of |
| from Wal-Mart in the little spray can) - then at | | | | offers. That can save you some big bucks, lets |
| least think about following these steps first:1. | | | | take a closer look...How much money can lower |
| Research! If you absolutely have to have a new | | | | interest save?Ok, lets use an interest rate |
| car, do yourself a favor and spend some time at | | | | comparison loan calculator and plug in some |
| and research some of the cars that you are | | | | numbers, and see what we get.Example 1 - lets |
| thinking about buying. If you have a specific car in | | | | say it's for a Chevy Impala:Loan amount: $25,000 |
| mind already, be sure to research the other cars | | | | Regular interest rate: 6.9% |
| in its class as well. You might even find another | | | | Special low interest rate: 3.9% |
| one you like better and is rated higher from | | | | Loan length: 5 years |
| consumers, has higher crash test scores, better | | | | Total savings with lower rate: $2,073.94That's |
| resale value, higher mpg's, or whatever else floats | | | | right, for this example the lower interest rate |
| your boat.2. Once you have decided on a car, | | | | would save you more than $2k over the 5 year |
| Edmunds has a great feature for pricing - it's | | | | length of the loan. That money would be much |
| called True Market Value. That is basically how | | | | better off sitting in an interest bearing bank |
| much other people are paying for that specific | | | | account, don't you think? Just for kicks, lets do a |
| car. This can give you great leverage when | | | | higher priced vehicle with the same comparison |
| negotiating the price on your new vehicle. But you | | | | criteria...Example 2 - Let's say you want a Tahoe |
| also must keep in mind that it's not a definite | | | | instead:Loan amount: $45,000 |
| price level, but more of a guide for haggling with | | | | Regular interest rate: 6.9% |
| the salesman about the price.3. Dare I say the "L" | | | | Special low interest rate: 3.9% |
| word? Loan! There I said it, whew. Once you | | | | Loan length: 5 years |
| have settled on a fair price for the vehicle you | | | | Total savings with lower rate: $3,733.08With |
| are buying, it's time to think about how you're | | | | example 2, you would save almost $4k in interest |
| going to pay for it. Since most of us don't pay | | | | over the life of the loan. That would be a nice |
| cash for new cars, most likely you'll need to | | | | down payment on your next vehicle don't you |
| obtain a loan for your new ride. If so, then you | | | | think?There are many different things that factor |
| need to pay close attention to the interest rate | | | | in to what vehicle you actually end up purchasing - |
| on the loan. This is not something that can | | | | comfort, resale value, safety, style etc. Just |
| normally be negotiated, but you still need to be | | | | make sure you add "research" and "interest rate" |
| aware of what your interest rate will be - even 1 | | | | to that list, and stay informed! |
| percentage point lower can save you over $700 | | | | |