Should you get an auto loan?
Category Autos / January 18, 2017
Whether you’re looking for auto loans in Bridgeton NJ or Los Angeles CA, there is one question you must ask yourself before making any final decisions: Should I get a loan or pay cash? The answer is more complex than you may think. While paying in cash is preferable in most situations, there are others that warrant a loan, at least for part of the purchase price. Here are some things to consider:
- Do you need a car for your business? If you have a business in which you drive clients around (e.g. Real estate agent) or you visit clients’ homes (mortgage or insurance agent) then you may be able to use part of your car payments as a business expense.
- Are you confident you can make the payments? The biggest mistake that many people make is go above and beyond their budget, get a car loan and then find that they can’t make the payments. Run your numbers and establish a budget; under-estimate rather than over-estimate on how much you can afford each month. Also consider whether you have a stable job or business. If there is talk around the water cooler about lay-offs, you may want to wait to buy a car.
- How much cash are you going to put down? If you want to increase your chances of securing a loan, you should have a down payment. The more, the better, but aim for at least 20%. The less you have to finance, the less interest you will pay.
- Early pay-off and other terms: Before you sign a contract, find out if there are options to pay off the loan early, and if there are penalties for doing so.
Auto loans in Bridgeton NJ can help you get into the car of your dreams; but it’s important to understand exactly what’s involved so don’t be afraid to ask questions.