Financing a car is hard. The process of budgeting, selecting the best vehicle for the money, deciding on a good down payment amount, applying for a loan, and more is an undertaking that can intimidate even the most seasoned car buyer. However, you may have made some car loan mistakes that could be costing you money in the long run.
The first mistake that many buyers make is focusing too hard on negotiating monthly payments, as opposed to the overall cost of the car. Although it is good to know what you can afford each month.
You should also know your credit score ahead of time. Additionally, do your homework before accepting a cash rebate or a low interest rate loan; it’s important to know what’s better for you, not just what may sound better.
Car buyers should also avoid rolling negative equity forward. If you still owe on a past car, don’t get into the practice of including that in the purchase price of the new car. Last of all, you shouldn’t finance add-ons that you can just purchase separately. It’s good to get into the habit of just saying “no.”
By being aware of these common car loan mistakes, you can save yourself quite a bit of money on a car loan and prevent yourself from getting into debt.