Buying a New Car, part 2

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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.

After you have agreed on the price of the car, dealers will often try to sell you optional add-ons, including Guaranteed Auto Protection (GAP). GAP offers protection from total loss or unrecovered theft, which goes beyond what normal auto insurance offers. Getting your GAP from Provident is usually cheaper than getting it from the dealer, and the cost (pennies per day) can be easily added to your auto loan. Provident also offers Credit Protection, to temporarily make your loan payments for you, in case certain major life setbacks make it hard for you to keep up.