How to Finance Your Hybrid Car in 4 Steps

How to Finance Your Hybrid Car in 4 Steps

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Financing a hybrid car is no different from financing any other model, though the cost of a hybrid is usually a few thousand dollars higher than a conventional gas-powered vehicle. Hybrid models use gas and battery electric power systems, the latter adding to the cost of these cars.

1. Consider your choices. The hybrid car market has expanded beyond the Honda Insight and the Toyota Prius, the first gas-electric models sold in the United States. The Prius and Insight are among the very few models sold exclusively as hybrids while other models offer gas or hybrid variants. The Ford Fusion, Hyundai Sonata, Toyota Camry and Chevrolet Silverado are among the models with hybrid options, costing several thousands dollars more while offering improved fuel efficiency and lower emissions.

2. Compare prices between dealers once you settle on a particular hybrid model. Some hybrid models offer rebates or discounted financing, something to keep in mind when considering your final price and when weighing your auto loan options. One of the most important considerations is the dealer invoice price, what the dealer pays for your car before options are added or manufacturer to dealer incentives are included. Your dealer most likely will not share that information with you, but that information can be found online through sites such as Kelley Blue Book, Edmunds and Consumer Reports according to Bankrate.com.

3. Contact your bank or credit union to obtain auto loan financing information from them. Ask for a loan quote based on the make/model hybrid car you are considering, obtaining rates for a variety of loan terms. Shorter-term loans usually mean a lower interest rate; your bank may offer an additional discount if you agree to have your loan payments deducted automatically from your checking account. A larger down payment can also yield a lower financing rate. Take the bank financing if the rate is competitive with what your dealer offers.

4. Make a deal. Armed with the information you need to know about your hybrid car, you are now prepared to negotiate with the dealer on the price you will pay for your car. Once you have agreed on price including taxes, fees and registration and have factored in rebates, make your down payment. The balance is what you will be financing, an arrangement you already made with your bank or credit union.

Special Tip

The commercial sites providing pricing information about new cars charge for that information. Compare plans before making your purchase. Federal tax credits for hybrid car purchases ended on December 31, 2010. Your state may offer credits and incentives which should not be factored into the price you negotiate for your car.

Adv. — Explore your auto loan and other financing choices by visiting SayGoodCredit.com.

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