When you walk into a car dealership these days, the salesperson will offer you two main things. First, he will offer you cars, and then he will offer you ways to pay for them. You should look at it this way. The truth is that you probably wouldn't buy a car from your bank, even if they started selling them. You may want to apply the same scrutiny to the finance packages offered at the car dealership and choose to buy only the car there and the finance package elsewhere.
It's possible that the financing options at the car dealership are fine, and in many cases, this will be the case. You should know, though, that just because you buy your car there doesn't mean you have to use the financing options and terms they offer. You can always get a loan from somewhere else, like a bank, to pay for the car in full. Then, you just pay back the loan to the bank like you would with any other loan.
You should make sure you know exactly how much you're paying for car financing. The APR, or annual percentage rate, is the main way to figure out the cost of any credit. This uses a standard formula to figure out how much the loan will cost. All lenders must use the same formula. But just because a car dealer has a low APR doesn't mean you should stop looking. You should also always find out how much the car would cost if you paid cash. Don't forget that giving a discount to people who pay in cash is the same as charging more for credit. If the cash price is lower, it might be better to get a loan from somewhere else and pay cash for the car. This way, you can take advantage of the better price and pay back your lender less.
You should also watch out for down payments and payments made at the end of the deal. These are payments that are made at the beginning or end of the loan's term. Even if the monthly payment terms are good, there could be large additional payments, so don't forget to factor them in when figuring out how much the loan will cost.
Car financing can be almost as important as getting a good deal on the car itself, and you should always think of it as part of the process of buying a new car.
