“If you’re planning to buy a new car in 2016, take the time to do your research before heading to the dealer. Buying a car is no simple decision. From buying outright, to buying a car on finance, there are many options. You also have to consider running costs. In fact, it’s probably the second most expensive thing you’ll buy after a home. So it’s important to make sure you get the best deal on financing. Follow these tips to make sure you buy a car you can afford and choose a model that you’ll be comfortable driving for years to come.”
Save money on auto financing by knowing your credit score and leveraging competing loan offers at the dealership. Put money down, keep the term as short as you can afford, and — of course — don’t buy more car than you can afford.
One of the biggest mistakes people make when buying a new car is forgetting to include the cost of auto financing in the total price.
For example, if you are buying a new Honda Civic, the difference between “sticker price” and the dealer’s invoice price (what the dealer paid for the car) is about $1,500. If you negotiate well, you could save $1,000 or more on the price of the car. If you then finance the car for four years at 6 percent with nothing down, you’ll pay over $2,000 in interest. Financing the car for three years at 4 percent with a $1,500 down payment, however, can save you over $1,000.