How to Pay Less for you Next Car?

Apart from education and home, a brand new car is one thing that can drain a considerable part of your savings and income. Follow these simple yet effective steps to pay less for a car loan and to make the most of it.

• Do your Research

Irrespective of if you are going to purchase an used car or a new car, do your homework on the available car loan options and the prevailing price of the cars that you are looking to buy. Compare the car loan features and also the interest rates before deciding on a lender. This could save a lot of money in future since car loans are expensive and getting stuck in an expensive loan could cost your dear bucks.

• Advantages of Long Term Plans for Car Models

If you are basing your purchasing on car models, try to adopt the strategy of a long term plan. For example, if you are looking to buy a luxury sedan, it is always advisable that you wait for at least two years after its launch. This way, you could save several thousand bucks. This time period will help you know if the car model has any flaws and also about the performance of the model. Maybe, you might find a good deal for the same car which has been used. The depreciation on car will help you get the most effective deal and will also help you save tons of money.

• Features of Short Term Plans for Car Loans

If you are basing your purchase in terms of car loans, you must follow a short term plan. Longer tenure might equal to lower EMIs and subsequently less pressure on your monthly budget but always opt for shorter tenures when it comes to car loans. If you pay a small down payment value and opt for longer tenures, not only your car loan interest rate would be considerably higher but you will also be extending the payment period more than depreciation value.

The value of your car might come down by even less than 10 per cent of the loan amount if you do not close the loan sooner. Always aim to finish your car loan in 24 months to 36 months so you don’t incur loss.

• Go for a Second hand Car

One important point to be aware of before you opt for a car loan is the depreciating nature of car. A report suggests that an average new car loses almost 11 per cent of its value as soon as it is purchased. If your are planning go for a high end car, it can often be affordable to get a two-year or three-year old car.

• Check your Repayment Capacity

Before you zero-in a loan scheme, make sure you assess your repayment capacity. Check if you can afford the down payment, the monthly EMIs and also prepayment charges, if any. You can make use of an online car loan EMI calculator to check if the loan comes within your budget. Also, ensure that the interest rate is affordable and that you are financially powered to buy your dream car. This could save a lot of hassles in future and also ensure that you are not going overboard with the loan.