Finance a New Car without Feeling Cheated

Drivers who are in the market for a new vehicle and looking to finance a new car may get worried about all of the ways they can get short-changed on this very important, and often expensive, investment. Government incentives on new car buying may send many drivers toward new vehicle purchases, but for too many buyers, there’s still that nagging feeling that they have signed off on paying more than they should for that new car or truck over time. Here are some various ways to beat the sticker shock blues when buying a new car or truck.

Get Pre-Approval for a Car Loan

Lots of experienced car buyers like to shop around for interest rates on financing deals before visiting the lot. This allows the buyer to focus on getting the best deal, rather than haggling about financing through the dealer, and also helps avoid some “dealer markup” schemes on financing.

Shop Around

It's critically important to get different quotes on a new car loan to be sure you're getting the best deals that you can. Research various third-party lenders and reach out to all of them to do your homework on your new car or truck purchase.

Know Your Credit Score

In a game of vehicle financing, knowledge directly translates to savings. Knowing your credit score allows you to capitalize on the best interest rates available for your credit risk category. Unscrupulous dealerships sometimes trick drivers into thinking that their credit is worse than it actually is; here again, a known credit score is the best defense.

Find Out Interest Rates Up Front

The beauty of unsecured loans (loans not backed by collateral) is that they generally carry “fixed rates” of interest—that means that with a known interest rate and a calculator, the buyer can figure out exactly how much they will be paying over time. Never negotiate financing based on a “monthly payment;” instead, find the interest rate and work backward to find out your total overall payment responsibility.

Build Up a Down Payment

If you're worried about paying too much for a new vehicle, scrape together all the cash that you can up front. This means less payment in interest over the course of the loan.

Think of Your New Vehicle As an Investment

There's a big difference between plunking down a boatload of money and treating a vehicle as a material possession, or carefully planning the financing for a vehicle while treating it as an investment. With the right protective insurance, and the right care in handling the exterior and interior of the vehicle (keeping the drinks securely in cup-holders, for example), the financial liability for vehicle can be balanced against what it is worth. If you have the blues about what you're paying for vehicle, make sure that you keep it in good condition, and balance your payouts against a good resale value in the future. This is one of the best ways to mitigate costs when you purchase a new vehicle.

Keep all of these things in mind when negotiating financing on a new car or truck.