After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
When you get ready to upgrade to a newer vehicle, you might want to begin by shopping for an auto loan. Most people need car loans to buy vehicles, as cars cost a lot of money. If you need an auto loan, you might want to know a few things about them before getting one. Here are four vital facts about car loans.
1. Your Total Price Is More Than the Sticker Price
The first thing to know is that the total price you pay for a car in the end will be more than the sticker price. A car's sticker price tells you how much the dealer wants for the car, but you must pay other things, too. You will have to pay the dealer fees and taxes, and you might want to buy an extended warranty, which also costs more money. Therefore, consider this fact when choosing a car and setting a budget.
2. You Should Buy Gap Insurance With New Cars
If you decide to buy a new car, you should also consider buying gap insurance. Gap insurance is a product you need only for newer cars, as it provides protection against a deficit you might encounter if you wreck the car. If you wreck the car, the insurance company will only offer the car's market value. Unfortunately, the market value might be less than the balance you owe on your auto loan. Gap coverage fills in this gap and pays the deficit if you encounter one.
3. Putting Money Down Eliminates the Negative Equity Problem
If you want to eliminate the negative equity problem when purchasing a car, put more money down on it. If you put enough money down, your car loan will be less than the car's market value. In this case, you might not need gap coverage.
4. You Should Carefully Consider the Duration
You can choose various durations for the auto loan. As you choose, compare the payment amounts for each one and the total interest you will pay. You may also want to compare the interest rates and other factors, too.
Learning as much as you can about auto loans is a wise move to make before shopping for a car. If you are ready to make a purchase, contact an auto loan lender to get approved for a loan today. To learn more, contact a company like Premier Financial Credit Union.
Share3 August 2021
