Buying a car can be a daunting task, but it doesn't have to be. With the right knowledge and preparation, you can purchase a car quickly and economically. The best way to buy a car is with cash. This eliminates the need for a loan and the associated interest payments.
If you don't have enough cash to purchase the car outright, you can still save money by getting pre-approved for a loan from your bank or credit union. This will give you leverage when negotiating with the dealer and allow you to compare rates. It's also important to keep your loan term short, no more than 48 months, and your monthly payment should not exceed 15 percent of your income. Improving your credit rating is another way to save money on an auto loan.
Keeping your credit card balance low and limiting the number of inquiries about your credit will help you get the best deal possible. If you don't want to take out a loan, leasing is another option. Leases are available for 24 or 36 months and come with a set number of miles. Finally, if you're looking for the best possible price on a new vehicle, do your research ahead of time.
Find out what rebates are available and divide the amount of your anticipated down payment by the number of months until you plan to buy the car. This will help you budget for future care.