Buying a car is exciting and could be a little stressful. First you need to decide whether you want to buy a new or used car. Then you need to crunch the numbers and determine your budget. Finally you will need to choose financing either at the dealer or your bank. Although car buyers often go to the dealer for financing convenience, you may be able to get a better deal with your bank.
Dealer Financing
One of the best aspects of dealer financing is the convenience of making the deal and driving your car home. Often dealers work with auto finance companies or the manufacturers. Sometimes car manufacturers provide special promotions that make dealer financing the best option. Dealerships with “in-house” financing will usually be a little more expensive, but could be great for people with bad credit. Of course you should always compare rates using several different options to find the best deal. Remember the shorter the time period you finance the cheaper the rate. Also if you have a down payment or trade in, you may get a great deal.
Bank Financing
Another option when buying a car is bank financing. Although this may require a little extra work, you may get a better deal. If you compare rates with your local bank who you work with on a regular basis you may be able to get a good rate on your loan. If you agree to have the payment automatically debited from your account, you may be able to save even more money. Of course, if you have a car you want to trade in, you may have to sell it on your own if you do not use dealer financing.
Before buying a car -- used or new -- you need to do your research and find the best deal for financing. Talk to your bank before you go to test drive the car. Tell the auto dealership what your bank is offering and see if they will match the rate. Whether you use dealer or auto financing make sure you understand all of the additional fees that will be included when you buy. Don’t go over the amount you have budgeted for your car. You do not want to be stuck at home watching television instead of cruising the highway because all of your money is going to your car payment.