financingBuying a car is typically the second most expensive purchase that most Americans will make outside a new home. Most car buyers need some kind of loan to get the deal done, so understanding your financing options is important even before you walk into a dealership.  Because it is a big purchase, it’s important that you approach it with a financially-savvy mind.  For 2014, here are a few things to keep in mind before you buy your next car:

Interest rates going UP – In the last 6 months of 2014, interest rates have moved up anywhere between a quarter to a half percent. And there is no reason to believe this trend won’t continue. If you are seeking a loan to buy the car, the higher the interest rate, the larger your monthly payment will be.  Liberty Buick GMC finance managers believe that interest rates will most likely continue to slowly rise in 2014.  So buying a car sooner rather than later might translate to a smaller monthly payment.

What influences your interest rate?  You may be drawn into a dealership because a certain model car comes is being advertised like this – Get a zero percent interest rate, for 60 months to qualified buyers.  That sounds terrific, however, that are many variable that come in to play to actually get that rate.  These variables include how much money you put down, your credit score, age of the vehicle (new or used), value of the loan and terms or length of the loan agreement.  Oftentimes these offers also come with a Manufacturer’s rebate.  Make sure you do the math, because it is sometimes cheaper to take the rebate versus going with a zero percent interest rate.

Discounts for Students, Military – Automakers offer discounts based on who is actually buying the car such as students, military and even members of a certain credit union. Make sure you inquire about these discounts before you finalized you deal.

Larger Inventories – Manufacturers will sometimes offer dealers $1,000 or more as an incentive to sell cars that make up an unusually larger inventory. Use a vehicle information source like Kelley Blue Book or Edmunds.com to see what incentives are being offered to dealers on the models that you are considering and then ask the dealer to share that cash incentive with you by further discounting the price.

Cynthia Schick,
CCP Web Design Staff Writer and Google Author