7 Smart Ways to Save Money On Car Financing


If you are going to buy a new car, then don’t forget to include car financing cost in your total cost. There’s a difference between the sticker cost and dealer cost of a car. Here, you can save some money if you properly negotiate your car loan terms with your dealer.

You have to smartly negotiate all the terms of a car loan with your dealer otherwise you might spend more money on your automobile than expected. However, if you are buying a car for the first time, then you can use these tips to negotiate terms with your car dealer.

1. Negotiate your car price

Whenever you walk into a car showroom, then car salesman will always ask you questions like - “How much are you looking to pay per month?” or “What do you want your payment to be?” This is the number one trick that salesman use, they negotiate monthly payment not the actual price of the car. They try to fix the highest possible monthly price that you are willing to pay for your ride. So, you should emphasis on negotiating the actual price of the car instead of the monthly payment.

2. Keep your loan term short

These days car dealerships use different loan plans to attract their customers. Some of the dealers even offer car financing options up to 7 or more years. This is totally obscured because the car is a fixed asset and its value is going to depreciate every year. So, you should never fall in the trap of long car loan terms as this is going to affect your pocket negatively in the end. Your loan term should not exceed 60 months in any way. Want to get your car financing and best truck finance advice, for this, you can find good advisors like AGM Finance brokerage firm.

3. Don’t get charmed by extra benefits

Your car dealers will make the deal more lucrative by adding unnecessary extra benefits in the plan such as gap insurance, rustproofing, fabric protection, extended warranties, paint protection, and car alarms. Some of these services might be beneficial for you, but the cost included by the dealer is ridiculously high. You can get car warranty and alarms aftermarket at cheaper rates as compared to dealer rate. Moreover, services like rustproofing in modern cars are completely unnecessary. That’s why pick extra benefits only if you are actually getting benefits from them.

4. Never settle for high-interest rates

If your credit score is bad, then you might receive outrageously high-interest rates loans for a car purchase. Some of the dealers might offer you interest rate up to 24% which is completely outrageous. It doesn’t matter how bad your credit score is, you can easily get a car financed up to 15% interest rate. So, you should not fall for the high-interest rates tactic of car dealers ever.

5. Keep your emotions out of the process

You should not let your emotions come into the picture when you are making the difficult decision of purchasing a brand new car. You might love the brand of your new car, but if you aren’t getting a good deal on car financing, then you should stop your purchase immediately. This might be hard for you but never compromise with your financial resources on a car loan.

6. Look around

You should not settle for one car dealership when you want to buy your dream car at affordable rates. You should search for different car dealership around your locality and compare the prices offered by all of them and select the dealership which comes up with the best deal according to your budget.

7. Select authorized dealerships

All the car dealerships present out there aren’t authorized to issue the car loans to their users. You have to check the authorization of your car dealership before making any contact with them because if they are not authorized, then they can’t issue your car loan.

You can easily secure car finance at affordable rates to buy your favorite car if you follow all these wonderful tips. However, always stay under your budget when you are purchasing a new car - this is one golden tip.

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