If you’re in the car market, you need to get the best deal for your dollar. No one should pay too much for a car these days, with dealers willing to bargain and interest rates so low. Before you test drive a car or start negotiating for the best price, do your homework by searching prices online and using an auto loan calculator to determine just how much car you can afford.
Haggling with a professional salesperson is not something everyone is comfortable with, and for good reason. They’re professional negotiators. and the good ones are able to hold a certain sway over the customer, charming them into signing whatever deal they’re given.
Research factory costs and perks online in advance by going to the manufacturer’s website or searching for similar used cars online. This will allow you to arm yourself with the facts. and you’ll be more sure of yourself in the presence of a professional arm-twister when it comes time to negotiate the deal.
Whether you’re going to the dealership or buying a car directly from the current owner, you’ll need to know how much car you can afford. Ask yourself a few questions, then use an auto loan calculator to fill in the details.
- How much money do you have saved for the down payment? Don’t raid your rainy-day fund for this. You should set money aside that is intended for this purpose, or you could wind up in the hole later on. The amount of down payment will affect your monthly payments, so put down as
much as you can comfortably afford to.
- How much is your trade-in worth? Research car values on a reputable site such as Kelley Blue Book. If you’re buying from a dealership, they may offer you more than this amount for your trade-in value, but beware. All this does is effectively roll that debt over into your new loan. In the end it will affect your payments, and you will end up owing more than your new car is worth – starting out upside-down on your new auto loan.
- What kind of interest rate can I expect? You should get a copy of your credit report and pay extra for your credit score, which is provided separately from the credit reporting bureaus. Then find out what interests rate look like on a new or used auto loan. No matter who handles your financing, you should be informed of current interest rates so you can negotiate for the best deal.
Armed with all of this information, use an online auto loan calculator to help you determine your monthly payment. If they payments are too high, try adjusting your down payment or the purchase price. In the end, you may have to save a while longer or downgrade your choice of cars, but if you research prices online and use an auto loan calculator to determine the monthly payment, you can figure out exactly how much car you can afford.
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