Avoid a Long-Term Loan.
Are you familiar with the term “upside down”? Hopefully you are not. However, many Americans find out once the finance people check their information out at Cheyenne Used Cars that they are indeed upside down in their current auto loan. What this means is that despite all the monthly payments you have been making on that vehicle from Pittsburgh Kia or wherever it is you bought the car from, you still owe a lot. In fact, you owe more on the car loan than the car is even worth!
So how does someone even get upside down in their car loan? Well, consumers are opting to go with long term car loans, sometimes as long as eight years! The main, and only, advantage to taking out a loan like this is that your monthly payment is going to be significantly lower. Buyers should hope that when they go to Denver Ford the salesman explains all of this information to them before signing them up for an 84 month term loan with only 4.99% APR. Sure, your monthly payment is going to be affordable but do the math and figure out how much you will be paying for that vehicle after you add up all the interest. Let’s say you are going to buy an inexpensive car for $15,000; at the end of the 84 months you will have paid $17,800 for that car!
Buyers can do a few things to help themselves out financially before buying a car. Make sure you have a down payment! If you don’t have any money saved, then take a couple of months to save up some cash. You will thank yourself in the end. A down payment of 5% is better than nothing, but 20% is what is suggested. Don’t let the salesmen talk you into a longer term loan. It might be tempting to only be paying $225 per month, but you are going to be paying that for seven years and will likely be upside down in your loan the whole time you are paying it off.
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