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Axel Hughes
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Get Money To Buy A Car ((TOP))



What if you don't have any money saved for a down payment? Sometimes you need a new car unexpectedly due to problems with your old car. Good news: Your old car can be part of your down payment as long as you have car equity.




get money to buy a car


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To help reduce your loan costs, start by shopping around for a car loan before you ever visit a dealership. Contact at least three banks and credit unions to see what loan terms you can get. When you find a good offer, get preapproved for a loan. After you fill out a preliminary application, the lender will give you an estimate of how much money they're likely to lend you and the interest rate they will charge. Being preapproved for a car loan does not obligate you to get a loan, but it can give you more negotiating power at the dealership.Alternative Car Financing OptionsMany people default to financing a new car through the dealership just because it's easy. However, third-party financing from a bank or credit union almost always offers better terms than dealer financing. If you've investigated third-party financing options and still can't afford the new car you want, consider these alternatives:


Van Alst says many people don't realize it, but the dealership is allowed to jack up the rate it offers you above what you actually qualify for. So with your credit score, "you might qualify for an interest rate of 6%," says Van Alst. But, he says, the dealership might not tell you that and offer you a 9% rate. If you take that bad deal, you could pay thousands of dollars more in interest. Van Alst says the dealership and its finance company, "they'll split that extra money."


So at the dealership, Reed and Van Alst both say, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you're planning to trade in another car and whether you're also looking to get a loan through the dealership. Reed says don't answer those questions! That makes the game too complicated, and you're playing against pros. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don't want to. Keep it simple. One thing at a time.


"You're led to this back office. They'll often refer to it as the box," says Van Alst. This is where the dealership will try to sell you extended warranties, tire protection plans, paint protection plans, something called gap insurance. Dealerships make a lot of money on this stuff. And Van Alst says it's often very overpriced and most people have no idea how to figure out a fair price.


A third of new car loans are now longer than six years. And that's "a really dangerous trend," says Reed. We have a whole story about why that's the case. But in short, a seven-year loan will mean lower monthly payments than a five-year loan. But it will also mean paying a lot more money in interest.


"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."


NPR has a personal finance Facebook group called Your Money and Your Life. And we asked group members about car buying. Many said they were shocked by how much money some other people in the group said they were spending on cars. Patricia and Dean Raeker from Minneapolis wrote, "40 years of owning vehicles and our total transportation purchases don't even add up to the cost of one of the financed ones these folks are talking about."


Even if you buy a slightly newer used car than the Raekers', the couple raises a great point. What else could you be spending that car payment money on? And if you can cut in half what you might otherwise spend, that's a lot of extra money for your retirement account, your kids' college fund or whatever else you'd rather be doing with that money.


This type of auto financing may also save you money, since an individual could sell the same vehicle for less money than a dealership. Here's what you'll want to know about how car loans for private sales work.


If the seller hasn't paid off their loan on the vehicle they're selling, your lender will first send the seller's lender enough money to pay off that loan. This important step will allow the seller's lender to release their lien on the vehicle so you can buy it with a clean title. Then, your lender will send any remaining amount to the seller. Your lender will become the new lien holder on the car's title until you pay off your loan.


Lenders will qualify you for a private sale auto loan based on your credit history, financial profile and the vehicle you want to buy. These are the same criteria lenders use when you want to borrow money to buy a car from a dealer. There are multiple factors to be aware of:


Besides paying cash, a personal loan could provide the money you need to buy someone's car. Personal loans also have minimum amounts you can borrow. The minimums vary by lender and by state but can be as low as $500 or $1,000. An unsecured may have a higher interest rate than a private sale auto loan, which is secured by the car you're buying. "Secured" means the car is collateral for the loan; if you can't repay your loan, the the lender can take your car and sell it to get back the money you still owe.


There are a few perks to buying a car with zero down. For starters, it allows you to drive a car off the lot without any money on hand. This makes buying a car less expensive in the short term. It can also help to open up your other options, allowing you to take money that might otherwise go toward a down payment and instead spend it on something else.


What's not to love about a car loan with zero down payment, especially if you don't have a chunk of extra money to dedicate to a car purchase right now? Well, there are several drawbacks to consider before agreeing to these loan terms, including:


Also consider that when you take out a car loan with no money down, you're enjoying the perks in the short term, but you'll have to pay for them in the long term. The best way to get all of the perks and minimize the financial costs of a car loan zero down payment option is to have a car to trade in. However, this only works if the car has equity in it, which means the car's value is greater than any loan still due.


After I bought the SUV, each car payment was a reminder of how foolish I had been with my money. As time went by, it became clear that I was only getting poorer, not richer. I also regretted not prioritizing more important things, like saving for retirement or for my kid's college tuition.


Knowing that I wasn't making any money off the car was truly an unpleasant feeling. After all, it's a well-known fact that new cars depreciate by 10% to 20% in value as soon as they're driven off the lot.


To save money and get closer to your goal, increase the amount you save every week and lower your spending. If you automate a minimum payment to your savings account with every paycheck, you take out the temptation to spend elsewhere and you can also know exactly when you'll hit your target.


A simple way to build automated savings towards a goal is with Chase Autosave. With easy ways to move money regularly from a Chase checking account into a Chase savings account, Autosave also allows you to build goals for your savings. Applying a goal for a car down payment can keep you focused on your new car, while Autosave makes sure your budget remembers your bigger goals.


Remember that the car you buy will come with a sales tax and fees, and will start up costs for insurance payments, maintenance, and gas money. Account for these extra costs when figuring out how much you need to save up for this big purchase.


You can start saving money automatically with Chase Autosave. Autosave allows you to set goals for how much you want to save over a time period and automatically transfer money from your Chase checking account to your Chase savings account. If you decide you want to save $40 each week, you can set Autosave to transfer that amount into your savings weekly. You can also choose to transfer a portion of each deposit you receive into your savings account.


You should choose the car you want based on what you can afford, your timeline, and your preferences. If you want a brand-new car, you may have to develop a long-term plan to save up for it. And if you have an immediate need for a car, you should adjust your plan and budget. By finding ways to save money and carefully tracking your spending, you can save enough to make your new car payments affordable.


It is recommended that you make a down payment on a vehicle, especially a new vehicle, because cars depreciate quickly. Being underwater or upside down on a car loan is when you owe more money on the car loan than what the car is worth. This is financially dangerous as it could trigger a cycle of debt. Here are 7 ways to get out of an upside down car loan.


People spend a lot of money on their cars and trucks. In fact, about 16% of the average American's total budget goes to transportation, including vehicle costs and fuel. That makes it the second-biggest expenditure after housing but before incidentals like food, education, and saving for retirement.


Another option is to use a no-haggle dealership, typified by CarMax, Vroom and Carvana. These companies can charge more than traditional dealerships, but generally score positive reviews from consumers. Each promises stress-free shopping with a non-negotiable price and money back guarantees, plus large and easy-to-search inventories. Each will also deliver a new car right to your door, in most instances. Unlike the others, CarMax also offers physical locations where shoppers can peruse cars. 041b061a72


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