The number of decisions you have to make when buying a new car can be dizzying. And while many of them will depend on your individual needs and wants, there are some steps you should take no matter what to ensure you get the best deal.
In seeking the best deal on your next car, you might've stumbled upon advertisements or offers to get a 0% interest auto loan. As great as this sounds, you may not save as much as you expect with this type of incentive.
“No money down!” These words are nearly impossible to ignore when you're shopping for a car. What could be sweeter than not making a down payment? Believe it or not, paying 20% upfront.
Here are a few good reasons to put down 20% on a car:
You might receive a lower interest rate
Making a sizable down payment means you're borrowing less. It also signals to lenders that you're a saver and probably a lower risk as a borrower. That means lenders are more likely to offer you a lower interest rate.
Think about the effort it takes to search for the right new car and to negotiate the lowest price.
Unless you plan to pay cash in full, the third leg of the stool is finding the best possible financing. Because loans typically come in 12-month increments, we're talking about a decision that will affect your household budget a minimum of two years and probably more like five or six.
Here are a few things to consider while looking for the best financing option: