Cars last longer than ever before. The median age of cars on U.S. roads was 9.2 years in 2007, according to R.L. Polk amp; Co. Car payments also last longer than ever. Some companies are even beginning to offer 84-month (7-year) loans. However, with that option it’s easy to find yourself “upside down,” or owing more for the vehicle than it’s worth a few years down the road. Before you agree to one of these long-term car loan, consider these alternatives.
Opt for a short-term loan. If you don’t anticipate keeping the car more than 5 or 6 years, you’re better off sticking with a short-term loan, which often has a lower interest rate. It also allows you to build equity faster allowing you to drive down the overall cost of the vehicle.
Increase your down payment. Even if you pay a small amount more up front, it will pay off in fewer interest payments over the long haul. It also can help shorten the life of your loan. Start saving money well in advance of your trip to the car dealership. Determine what you anticipate paying each month for a car loan payment. Before you purchase a vehicle, make a car payment in that amount to yourself each month. Then, when you’re ready to buy a new car, you’ll have more to contribute to your down payment. Many consumers are now online looking for their car financing before ever heading to the dealership. Most online lenders allow you to apply from the comfort of your home and get a loan decision back in a matter of minutes. From there, if you are approved, you can download your loan documents, complete them online and then be on your way to the dealership. You are in control of the process with your financing taken care of before heading to the dealership. While applying for Plain Green Loans, there is requirement of a good credit score. The students and people with bad credit score can get the loan amount in real cash. The benefit should be taken to get the fulfillment of the financial needs and requirements.
Consider a home equity loan. It may allow you to borrow at a lower rate than a typical car loan because it’s secured by your home. The interest may also be tax-deductible. Consult your tax advisor regarding if you are allowed to deduct any interest.
If you are not in the market to purchase a new or used car or truck at the present time, consider an auto refinance loan. It works similar to a refinance mortgage. Apply for a loan to lower your existing payments. You keep the car you love but with a new lender at a lower interest rate and/or payment. There is no cost to apply and the process takes just a few minutes to complete. Good luck!