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Tips on Saving Money on a Car Loan

In every sphere of life, every person is bearing the blunt of a harsh economy. Day by day, the cost of living is rising. Surprisingly, the figure on the pay check is reducing every pay day. The chances of getting laid off are higher than any other time. It is getting more difficult to save. Many people cannot afford to purchase a car from their own savings but since a vehicle is essential for moving around, the option of a car loan is welcome. With a little more knowledge you can save a lot more money on your car loan. This article discusses tips on how you can do this.

Tip 1 – The best way of saving money on a car loan is by doing comparison buying. Visit several dealers and get as many quotes as you can. Compare these quotes and pick the one that adequately meets you car loan needs. You can also check for the terms and conditions that surround the loan. For instance, you may find out a certain dealer is offering a car loan at lower interest rates but at the same time having a longer repayment period. This option may sound better than a dealer offering a similar loan at higher rates but in real sense you will end up paying more for the car loan with a longer repayment period.

Tip 2 – To save money on your car loan, consider sourcing your car loan from independent lenders such as banks and credit unions. The interest rates charged by these independent car financing bodies are lower than those charged by auto dealers. This is because the car dealers work directly with your credit score. The rates are also higher since they also work with banks. Some unscrupulous dealers may also be out to make a quick kill by charging you exorbitant rates. This way, they end up making more money from the financing than the sale of the car.

Tip 3 – Another method of acquiring a vehicle is by leasing. This option was once popular in the 1990s. This method saves you money since the monthly lease payments are less than monthly car loan payments. However, it is necessary to check out all the terms and conditions of the lease.

Tip 4 – You can save money by using your home equity to secure your car loan. This is because car loans insured against home equity attract lower interest rates since the rates are determined from the value of your home.

In summary, saving money on a car loan requires a lot of discipline. It also requires a high level of financial maturity and budgeting.

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