Financing Tips for Your New Car
Compare Your Options
If you are shopping for a new car, and you are planning on financing your purchase, consider lending institutions you already have a relationship with. Local banks, credit unions, and trade associations with lending divisions often give preferential rates to their account holders and members. If you are already a customer or member, it can’t hurt to access a line of credit as a possible option.
When you have a line of credit available from an independent lending source, you’ll be able to compare it to your dealer’s financing options. If you don’t like what the dealership has to offer, you can always choose to finance your new car using your own source.
In addition to the finance rate, it’s important to know if the loan you’re considering has an early loan payoff penalty. This type of penalty can practically negate a low interest rate if you choose to pay off your loan early for any reason. Make sure to read the fine print before you sign to make sure you understand all the details of the loan agreement.
Cash Back or Special Financing?
Occasionally the manufacturer will offer a choice of receiving a cash rebate or special financing when you purchase a new car. It may not be obvious as to which option will save you more money.
What is a Good Down Payment Amount?
According to Edmunds.com, the average down payment for a vehicle purchase was 12% (both new and used car purchases included) in 2017. Ideally, if you are going to purchase a new car, you will want to put at least 20% down in order to offset the first year’s depreciation – and the larger the down payment, the better.
Just like when you apply for a mortgage, you will get a better interest rate with a larger down payment. Additionally, you’ll have a better chance of being approved – and your monthly payments will be lower.
As an experienced and reliable Ford dealer, Wayne and St. Charles residents can count on our dedicated team at Hawk Ford to offer the best deals around on a new or used Ford vehicle. Stop in today and take a test drive – then check out the affordable financing options we have available. You won’t be disappointed!