You
can
get your score at www.myfico.com
and learn how to improve your
score before you start shopping for a loan.
Now even if you qualify for the zero-rate deal, don't jump at it without considering your options. In many cases, you will be given a choice of a zero-rate deal or cash back. As a general rule, my advice is to take the cash back on a car purchase under $20,000 and to opt for the zero-rate offer if your car costs more than that.
While dealer financing can be a great option, especially if you qualify for a zero-rate deal, it always pays to shop around at other lenders before you head to the dealer. Check out loan rates offered by banks, as well as any credit union you may be able to join. Credit unions often offer the best rates. Take a look at Yahoo!'s list of Credit Unions to see if any might work for you. Quite often, you can join a CU if you know someone who already belongs.
If the only way you can "afford" a car is to take out a loan longer than four years, I've got news for you: You can't afford those wheels. Adjust your price target; don't lengthen the loan term.
And by the way, if you really need to buy a new car ASAP, but you only qualify for a higher-rate loan because your FICO score isn't exactly sparkling, keep in mind that you may be able to refinance the loan as time goes on. If you take out a four-year loan and refinance a year later, refinance into a three-year loan. If you choose another four-year loan, you've stretched out the payments on that car to five years, which means another year of those costly interest payments. That's financially stupid.
Insurance Tips
After shelling out the big bucks to a buy a car, I see so many people make the mistake of trying to save money on their auto insurance. Folks, that is just downright silly. The quickest way to financial ruin is to shortchange your insurance coverage.
I want your policy to offer at least 100/300/50 coverage. Translation: $100,000 of bodily injury liability coverage, with a $300,000 limit per accident, and up to $50,000 for property damage. If you skimp on the coverage and end up the responsible party in an accident, the other party can go after your assets -- and, yes, that means your savings and home.
Getting the higher coverage will indeed raise your annual premium, so the least I can do is clue you in on some ways to save money on your policy.
Now even if you qualify for the zero-rate deal, don't jump at it without considering your options. In many cases, you will be given a choice of a zero-rate deal or cash back. As a general rule, my advice is to take the cash back on a car purchase under $20,000 and to opt for the zero-rate offer if your car costs more than that.
While dealer financing can be a great option, especially if you qualify for a zero-rate deal, it always pays to shop around at other lenders before you head to the dealer. Check out loan rates offered by banks, as well as any credit union you may be able to join. Credit unions often offer the best rates. Take a look at Yahoo!'s list of Credit Unions to see if any might work for you. Quite often, you can join a CU if you know someone who already belongs.
If the only way you can "afford" a car is to take out a loan longer than four years, I've got news for you: You can't afford those wheels. Adjust your price target; don't lengthen the loan term.
And by the way, if you really need to buy a new car ASAP, but you only qualify for a higher-rate loan because your FICO score isn't exactly sparkling, keep in mind that you may be able to refinance the loan as time goes on. If you take out a four-year loan and refinance a year later, refinance into a three-year loan. If you choose another four-year loan, you've stretched out the payments on that car to five years, which means another year of those costly interest payments. That's financially stupid.
Insurance Tips
After shelling out the big bucks to a buy a car, I see so many people make the mistake of trying to save money on their auto insurance. Folks, that is just downright silly. The quickest way to financial ruin is to shortchange your insurance coverage.
I want your policy to offer at least 100/300/50 coverage. Translation: $100,000 of bodily injury liability coverage, with a $300,000 limit per accident, and up to $50,000 for property damage. If you skimp on the coverage and end up the responsible party in an accident, the other party can go after your assets -- and, yes, that means your savings and home.
Getting the higher coverage will indeed raise your annual premium, so the least I can do is clue you in on some ways to save money on your policy.
- Boost your FICO score.
Yep, once again
your credit score comes into play. A version of your
FICO score is used by
many auto insurers when determining your rate. The
higher your score, the
lower your premium.
- Buy
all your
insurance from one company.
If you own a home, shop for both
homeowner's insurance and auto insurance with the same
company and you may
be able to reduce your costs by 10 percent or more.
- Clear
your DMV record.
Just
because you paid your tickets doesn't mean the info
has been updated on
your official DMV record. Contact your state DMV to
make sure any
blemishes have been removed.
- Take the high deductible. Sign up for a higher deductible of $1,000. Remember, insurance is really only meant to protect you from big-time losses -- not small nuisance problems. By opting for the higher deductible you can shave 15 percent to 30 percent off of your annual premium and lower the risk of annoying your insurance company.
