Before you have the keys to your new auto firmly in your hands, there are a few commonsense steps that you should follow to find the best financing for your purchase.  The Wall Street Journal suggests that “your monthly car payment should represent no more than 20% of your disposable income.”  Car insurance and the price you pay for petrol are just two of the costs you should keep in mind when calculating your monthly budget.  By following a few simple guidelines, you’ll have no problem finding a car financing deal that provides you with peace of mind and satisfaction.

5 Guidelines For Financing Your Auto Purchase

It’s important to compare car finance deals before you begin your search for a new car

Guideline #1

Understand that an ideal car loan will be from three to five years.  You’ll save a great deal in interest costs if you can make a respectable down payment on the vehicle, but you must be careful not to deplete your savings too much.  Having money on hand for emergencies is important when dealing with the unexpected financial hits that life throws at you.

Guideline #2

Before you begin the process, determine what your monthly bills are and how much payment you can afford.  You want to be able to afford an enjoyable lifestyle so your monthly payments shouldn’t  impact you too hard with large payments you struggle to make.  You should also determine your job security, any promotions that you anticipate, and other costs regarding household repairs that you might need to make.

Guideline #3

Set your budget to be spent on the car before you go shopping.  You should familiarize yourself with what cars cost, how to save money, and how to find competitive financing rates which can increase the amount of value that you get for your money.  If you have a budget in place, stick to it. Once you get into a car dealership you shouldn’t be “taken in” with shiny new automobiles and high-pressure salesmen, who try to convince you that you need more than you had planned to spend.

Guideline #4

Find out about early pay-off fees that may exist in the finance deal that you locate.  If you get a promotion, or save more money than you expected and plan to use that money to pay off your car loan, you don’t want to incur any penalties for paying off your loan early.

Guideline #5

If you don’t know, ask.  It’s imperative that you express any questions or concerns that you may have to the company with which you are partnering(right word?) to compare car finance deals.  You’ll want to find a car finance agreement that suits your budget and one that will allow you to purchase a good car that meets your individual needs.  In essence, you should look for competitive financing that lets you make monthly payments and then take title of the car at the end of your payment schedule.

Finding an excellent car with a responsible car and competitive car financing deal should always begin with these common sense guidelines..
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