Once you have negotiated the price for your vehicle, it is time to think about how you are going to pay for it. If the price is low enough that you can pay cash, it is the best way to go. Cash is always the cheapest way and usually dealers will give you a good deal on cash payment. But if you need to finance a car, there are several options. You can use a dealerships finance office to find you a bank, you can use dealerships (in house) financing or you can find your own bank.
Lets discuss them separately so you know what you are going to be dealing with. Car financing is a big business for the banks and the dealers. Usually a bank makes money on the interest and the dealer on every deal they make. We have seen the paychecks of the finance
Generally speaking, it is going to be more expensive to go through the dealers bank, since the dealer has to make money and the bank makes a profit; and you are the one that pays for it.
In house (dealer) financing may be cheap as far as the loan fees and charges are concerned, but interest is going to break your bank.
The best way other than cash is to find a bank that will finance your car. Go to your local bank where you do your everyday banking and ask them what options are available for you. Usually they are very good to their customers.
Assuming you have an above average credit score, you should be able to get a competitive rate. Banks know that once you go to the dealership, the
As a common sense strategy, go to the websites like Kelly Bluebook and Cars.com, do the research about the current interest rates on car loans; it will give you more bargaining options and power to negotiate a successful loan term.
As far as the financial side of a loan is concerned, there might be a down payment required. If you make a down payment you should ask for a lower interest. Remember that you paid part of a loan and the bank gets your car as collateral.
The more cash you pay, the lesser the loss that bank is exposed to, so be tough, you are the customer, you can always go to the other bank or a dealer to get a better rate. Do not say it in their face but show that you are aware of the options you have.
Financing options are numerous and whichever you choose, try to be informed and have the knowledge of what the alternatives are before signing the papers. A well informed and thought through decision is always the best financial decision when it comes to the car financing.