How To Finance a New Car


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    Determine the amount you will need to finance via a vehicle loan.

    • Your total costs will likely be significantly more than the sticker price of the new vehicle including sales taxes, warranty payments, and licensing fees that ultimately make up the total price of the vehicle. Depending on the vehicle cost and dealership requirements, this could add a few thousand dollars to your total vehicle price.
    • Making a down-payment will help reduce the total loan amount, thus decreasing your monthly payments and interest expenses. Provide as large a down-payment as possible based on your cash reserves and payment ability.
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    Compare loan offers from a variety of providers after you calculate the desired loan amount needed to buy the car.

    • Car dealerships often have a financing department operating in-house. However, they may not have the most attractive loan terms for which you could be eligible. While these in-house financing departments offer the convenience of being tied directly to the dealership, you should seek offers from competing loan providers so you have more than one to consider.
    • Credit unions are non-profit organizations and may offer members better interest rates on vehicle loans. Banks might also offer a better deal based on other loans or deposit accounts you hold there.
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    Ask the dealership to match the best loan offer you collected from the competing financial institutions.

    • If a bank or other private lender offers you better loan terms than the car dealership, ask the dealership if they would be willing to match the best competing offer. Many dealership financing departments would rather match a competing offer than lose your lending business. Never assume that their first offer will be their best offer.
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    Read all loan contract and purchase agreements carefully before signing.

    • Review all paperwork to verify everything matches the terms the salesman or loan officer promised you. It’s easy to overlook hidden fees and non-disclosed penalties in the fine print of an agreement or contract.