Adulting 101: How to Finance a Car

Adulting 101: How to Finance a Car
  • Opening Intro -

    At some point, you may need to buy a car.

    Perhaps adulting has hit you hard, and a car has become vital.

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The following will help you finance a vehicle.

Check that Score

The first thing to do is check your credit score. The better your score, the better your choices will be.

If you notice your scores aren’t high, work on changing that. A good credit score is vital for anyone who wants to get off on the right foot. It may take a while, and you have to be responsible for the money you borrow.

Figure Out Your Budget

It may not be something you might have thought about before, but having a budget is vital.

Limiting yourself and being responsible should help you figure out how much you can afford to spend on the payments for this vehicle. Miscalculating this part means headaches and feeling so financially strapped that you might feel ready to burst.

Do Your Research

The next thing to do is dive into what financing is. You shouldn’t do something without understanding it fully. That’s a big rule in adulting. Look up and research the best way to finance a car.

Review all your options. Also, do your research before you walk into a dealership. You want to be prepared to avoid overpaying or getting swayed into purchasing expensive add ons that you don’t really need.

Doing your research and gathering knowledge will help you make the best decision that your wallet will thank you for.

Gather the Down Payment

The next step to take is to gather enough money for the down payment. Part of the reason you’re budgeting is so that you can put enough cash away to get your car.

Doing this means you can get the best deal possible when you are ready to finance your vehicle. The more you’re able to put down, the better the deal. The interest rate will be lower, and that could mean a better monthly payment.

Look at the Cars

Be sure to set aside enough time to research cars. Sure, you want to buy a car you like, but you should be comfortable with the payment. There’s no point in keeping cars on your list that you can’t afford.

This doesn’t mean you can use them to inspire your choices. There’s always a cheaper version of a luxury vehicle, so it’s okay to use pricier vehicles in that way, but keep them away from your list of actual possibilities. If you do this right, financing the vehicle you want will be a breeze.

Check the Term Lengths

Pay close attention to the term lengths. Each loan will last a particular amount of time. While longer-term lengths are going to be quite enticing to you, since they usually mean lower monthly payments, it’s important to stay away from those.

The shorter your term length, the better because it means you’ll be paying less interest. Don’t go over your budget though. It’s a delicate balance to strike, but it can be done.

Say No to Add-Ons

The pre-approved loan should remain the same so that you can maintain your budget. The problem is some dealerships are looking for ways to make more money, and one way they do this is with add ons.

These may be plans like a tire protection plan or the paint protection plan. They make it sound like it’s a wise idea, but these plans are usually overpriced. If you want these or other warranties, get them afterward. Keep your loan the same and just buy your car.

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Read Everything

You want to read everything regarding your loan. The contract is going to be lengthy. It’s going to be annoying to read, but you must do this.
As an adult, you have to do a lot of things you won’t like.

Whatever you don’t understand, try to get clarification on it. The company or lender should answer any questions. It’s their job to make sure you understand, so don’t be afraid to spend all the time in the world deciphering the contract.

Now, you have steps that should help you finance your vehicle. Talk to a financial advisor if you need some help figuring all this out.

Image Credit: how to finance a car by envato.com

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