Financing a New Car or Used Car Purchase

By Sharat from money-au.com.au

The internet is perhaps the single greatest resource for determining the cost of buying a car. In fact, you can probably find auto loan interest rates from all over the world. In the U.S., auto loan interest rates across the nation can be found here at auto loans. If you wanted to find something as exotic as even an Australian car loan you could easily find what the interest rate would be by doing a quick web search.

Finding out what the financing options are for a new car is not where it ends when it comes to buying a car. Buyers should be looking for low interest or zero percent financing if they can get it.

Given the rapidly changing landscape of automakers, in particular, the finance units of the major automakers, zero percent is not always guaranteed, particularly for customers who do not have near perfect credit records. In fact, in this day and age, it's probably very difficult even for the most flawless credit record.

The financial arms of automakers will probably offer buyers the best financing options in the market for their vehicles. Clearly, it is the finance unit's objective to help deliver sales for the rest of the group, and offering attractive financing options is one way to do this.

However car buyers should not take it as a given that these units will offer the best rates to begin with and consumers should make a little extra effort in researching rates from alternative  sources of financing before walking into a dealership. Competitive interest rates can be obtained from credit unions and organizations such as AAA or USAA sometimes offer consumers access to interest rates that are simply not available to consumers who ordinarily approach banks.

Some auto finance companies approve their loans online and give their customers the ability to walk into a dealership with a blank check the very next day after application.

Capital One Auto Finance for example allows their borrowers to bring a check to the dealership without any obligation for taking a loan and then allows their customers to borrow a pre-approved amount should they see something they like.

Consumers should also be aware that they can negotiate interest rates. Dealerships who offer financing see some of that interest income, and therefore it is in the interest of the dealer to negotiate interest rates and win the customer's business.

The most important rule to remember when buying a car is for borrowers to buy cars that they can afford and not overreach themselves. As important, once a deal has been done, the buyer should reach for the calculator and work out exactly what the car is costing, by multiplying the number of payments they have to make, with the monthly payment, adding on the down payment and the value of any trade in.