Although it is ideal to pay cash for a gently used car that
is rated highly by Consumer Reports,
most vehicle buyers take out a loan. Note that getting a modest car loan and
repaying on time will boost your credit score for young people with slim to no
credit history. One of my favorite
quotes is from a team of bankruptcy researchers (Sullivan, Warren, &
Westbrook): “cars depreciate faster than they toll downhill.” So keep that loan
to a modest amount and be realistic about what you really “need’ in a vehicle.
1.
Know your credit situation. Go to annualcreditreport.com
to review your free credit report.
2.
Shop around for a loan. NEVER get your financing
from the dealer.
3.
Don’t be upsold.
Decide before you go what you can afford and stick to your plan. Skip
the rust proofing (no longer needed on new cars), extended warranties, etc.
Dealers push they add-ons hard because their profit margins on the vehicles
themselves are slender as consumer shop on the internet.
4.
Avoid the Yo-Yo trap of conditional financing.
Arrange your loan ahead of time from your credit union or bank.
Read the details at: Time/Moneyland http://moneyland.time.com/2012/06/18/4-rules-for-getting-a-car-loan/?iid=pf-main-lede
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