Buying a New Car, part 2
Financing Your New Car
If you decide to finance your car, be aware that the financing obtained by the dealer--even if the dealer contacts lenders on your behalf--may not be the best deal you can get. Contact Provident Credit Union directly for your best deal. A pre-approved loan from Provident Credit Union can save you a lot of hassle and money, as the dealer cannot then use financing as a way of hiding the true cost of the auto. If you decide to shop around for the best deal, compare the annual percentage rate (APR) and the length of the loan. When negotiating to finance a car, be wary of focusing only on the monthly payment. The total amount you will pay depends on the price of the car you negotiate, the APR, and the length of the loan.
Sometimes, dealers offer very low financing rates for specific cars or models, but may not be willing to negotiate on the price of these cars. To qualify for the special rates, you may be required to make a large down payment. With these conditions, you may find that it's sometimes more affordable to pay higher financing charges on a car that is lower in price or to buy a car that requires a smaller down payment. Read more about how dealer financing can actually cost you more, in spite of a lower advertised APR, and other things to look out for.
Before you sign a contract to purchase or finance the car, consider the terms of the financing and evaluate whether it is affordable. Before you drive off the lot, be sure to have a copy of the contract that both you and the dealer have signed and be sure that all blanks are filled in. Read more about understanding vehicle financing.
Some dealers and lenders may ask you to buy credit insurance to pay off your loan if you should die or become disabled. Before you buy credit insurance, consider the cost, and whether it's worthwhile. Check your existing policies to avoid duplicating benefits. Federal law does not require credit insurance. If your dealer requires you to buy credit insurance for car financing, the APR must, by law, reflect the extra cost. If you are interested in credit insurance, consider Provident's excellent Credit Protection program, which offers three different levels of protection.
