Price Negotiating

Should I take the full rebate or opt for low rate dealer financing? 

1460351792225_Car-insuranceSo you have decided to buy a car. This is a big decision that you should not take lightly. The car buying process can give you headaches with all the options, models and brands available. And do not forget the salespeople who at times may not take into consideration your best interests when they are trying to convince you to purchase a car. Do not give up as the car of your dreams exists. Before you make a decision, you should think about your financing options. Is full dealer financing or low rebate option the way to go? There are tips that can assist you make an informed decision.


When thinking about this crucial question, you will want to keep in mind how much of down payment you have for your new car. This should be compared with your monthly income. A rule of thumb is your monthly income should be deducted no more than 20% to pay for the car. Once you have determined the amount, other costs associated with the purchase are classified as variable and fixed expenses.


Fixed expenses

A new car, even if it is not being driven, comes with fixed expenses. They are the amount you spend whether you are driving your car or not. They include license fees, tax, insurance, loan payment and the down payment (a one-time payment).  The down payment when done in form of trade-in or cash lowers the cost of the vehicle and the amount you will be required to fiancé. If you are paying for a low amount you will be privy to some flexibility to opt for lower payments for a longer period of time. Alternatively, you can decide for a short period to save on months of interest payments as well as the possibility of getting a lower loan rate.


The loan payment will be constant for every month unless you decide to prepay your loan. Prepayment is not an option that is open to a lot of people. However, there are advantages of adding some extra dollars to your monthly payments. You will reduce the amount of interest that you will pay on the loan. Your good payment history will be reflected in your credit report. And obviously, the car will be yours sooner.


Cost of insurance will vary a lot depending on your region, other drivers in your household, your driving record and the car you are insuring. Remember not all insurance companies have the same principles and policies. You may be shocked to discover massive price variation between several different quotes for the exact or similar coverage. It is therefore wise to shop around. Consider using insurance rating services as they can provide you with an idea if the insurance company of your choice is good or not.


Lastly, there is improvement you may decide to make on your car. The possibilities available are endless. They include performance enhancements, navigation systems, security systems, high end stereos and custom wheels. All these are options that make your vehicle more fun to drive and look at. Take note that they add the cost of your vehicle.

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