When applying for an auto loan with less than perfect credit, it is inevitable the loan will come with a higher interest rate. While this makes the vehicle more expensive, there are ways you can reduce the cost of your loan. Follow these simple tips:
- Consider the choice of your vehicle. This is probably the most important decision, when it comes to determining the cost of your loan. You can save more money simply by choosing an affordable vehicle. Subcompact, compact and midsize cars are better choices than trucks, vans and large SUVs. These cars not only come with a lower price tag, but insurance rates, gas mileage, depreciation and maintenance costs will also be less. Important consumer tip: Make sure your car payment is below 10-15% of your monthly income.
- Keep the loan term short. The length of your car loan plays a big part in how much you will end up paying for your vehicle. The shorter the loan term- the lower the overall cost of the loan.
- Make a down payment. Making a down payment will help reduce the cost of your car loan. If you can put down at least 10% at the time of purchase, this will save you a lot of money in the long run. Making a solid down payment will also help offset the higher interest rate over the life of the loan.
Your goal when financing a car should be to get the vehicle you need while getting the chance to improve your credit through on-time loan payments. Here are three more tips to keep in mind: know your budget before beginning your car search; stick to your instincts and do not allow yourself to get talked into a more expensive car; focus on the total cost of the loan as opposed to just the monthly payment.
If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.