The Auto Consumer Review

How To Save Money On Your Next Used Car Auto Loan:

Financing the purchase of a car is a reality for most car buyers today. In fact, almost 4 out of 5 people who buy a vehicle have to finance it instead of paying for it entirely. This is not surprising when you consider that car prices average in the $20,000 - $40,000 range, and not many have that kind of money saved to be able to pay for a car.

Paying for an auto loan also usually consumes about 20% of the disposable income of a household each month and that means that it involves a large sum of money over the life of the loan. So it's important to try to get the best loan possible and keep your costs as low as you can. Here are some ways that you can save money on your next used car auto loan:

• Make sure that you have a monthly budget established so you know exactly what your average bills are going to be each month. With that in mind, you can easily establish the amount of money that you can afford for an auto loan payment. Although this may seem very fundamental it is surprising how many people don't really make such an effort to live within their means. If your monthly budget is telling you that you can't afford a payment above a certain amount, then you have to be firm and not allow emotion to rope you into a car loan for more than that figure. If you overextend yourself you will pay the consequences later on.



• Establish and maintain a good credit history so that when the time comes for getting an auto loan you will be able to get the best rates possible. Again, this is such a simple concept but one that many people fail to appreciate and put into practice. You will have to be organized and pay your bills on time, and keep track of your credit score as you do. If you find that detrimental entries are made on your credit history, which is not unusual, get it resolved as fast as you can and keep your credit score as high as possible. This one single factor will influence how much you pay for every loan you get more than any other.



• Shop around for your auto loan. There is no need to jump on the first one that comes along. Get competitive quotes and choose the one that is most favorable for you. Usually this is best done in advance of shopping for your vehicle. Once you are in the middle of the buying process it is easy to let emotion take over and cause you to enter into a loan contract before you have really done all of your research and thought it through completely, just so you can get the car that you really want faster. Instead, make the loan a separate part of the whole process and one that should already be in place before you start your car shopping adventure.



• It's usually best to avoid getting your used car auto loan from a car dealer as they often mark up these contracts considerably in order to make profit not only on the sale of the car but on the financing as well. Usually the finance manager is one of the highest paid people in the dealership, especially if they are good at what they do. Just avoid that whole problem by arranging your own financing in advance. You may choose to have them try to compete with your own financing, but don't rely on them to do all the work for you or you will most likely pay more than you should.

Getting an auto loan for a used car purchase is actually one of the places where consumers can lose more money due to not shopping smart than any other place. So maintain good credit, shop around and get your own loan before buying and you should be able to save lots of money with each monthly payment made.