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