Remember Vehicle Financing When Evaluating New Autos and Deals
WASHINGTON, Nov. 2 , 2010 /PRNewswire-USNewswire/ — With new model year vehicles arriving in dealer showrooms across the country, consumers who are considering their next purchase or lease should polish up on vehicle financing, says Americans Well-informed on Auto Retailing Economics (AWARE).
“While affordability, performance and fuel economy are all important considerations in the car buying process, so is vehicle financing,” said AWARE spokesman Eric Hoffman. “With competitive financing rates offered year-round by multiple lenders, potential car buyers should do their homework to determine what financing options are best for them.”
In preparation for buying or leasing a car, consumers should:
- Develop a budget and determine what you can reasonably afford for a monthly car payment. Do not agree to terms that would make you exceed your budget even by a few dollars. When calculating your monthly expenses, don’t forget to take into account the cost of gas, maintenance, parking, insurance and other fees.
- Check your credit report, which can affect the interest rate you can negotiate. In general, consumers who have a history of paying their bills on time are considered good credit risks and therefore have higher credit scores.
- Compare rates and financing terms from different lending sources, including banks, credit unions or dealers.
- Familiarize yourself with common financing lingo, such as Annual Percentage Rate (the cost of credit for one year expressed as a percentage) and finance charge (the total dollar amount you pay to use credit).
- If leasing is a consideration because you like to have a new car every few years or want a lower payment, keep in mind that you agree to a mileage limit, may have to pay for excessive wear and tear, and will not own the vehicle after the lease ends.
- Decide which bells and whistles you’re willing to pay extra for and which ones you can live without. Examples include leather interior, built-in navigation system or phone dock.
AWARE is a vehicle financing industry effort to help consumers understand how auto financing works. The organization provides potential buyers of new and used autos with the tools and resources they need to navigate the auto financing process. The AWARE website at www.autofinancing101.org includes materials in English and Spanish.
AWARE’s members include: American Financial Services Association, National Automobile Dealers Association, National Association of Minority Automobile Dealers, American International Automobile Dealers Association, Ally Financial, American Honda Finance Corp., American Suzuki Financial Services, AutoNation, Ford Motor Credit Company, Group 1 Automotive, Inc., Lithia Motors, National Auto Finance Co., Nissan Motor Acceptance Corp., Nuvell Financial Services, Saab Financial Services Corp., Sonic Automotive, Inc., Toyota Financial Services, United Auto Group, Inc. and Wells Fargo Auto Finance.
SOURCE Americans Well-informed on Auto Retailing Economics (AWARE)