| You want to buy a car but you have bad credit. What | | | | to get this down as much as possible. When you're |
| do you do to pay the best rate on the credit you get | | | | working on your financing, you'll be focused on the |
| and not get taken advantage of? We'll give you some | | | | interest rate and monthly payment, but don't lose sight |
| tips and describe some of the most popular financing | | | | of the total amount financed, because this is what your |
| scams dealers try to pull. | | | | interest amount will be calculated on. (Spend some |
| Cars are expensive, whether they're new or used. | | | | time at home looking at the difference in your monthly |
| Financing a $20,000 car over five years will cost you | | | | payment if you pay, for example $19,000 or $20,000 |
| $334 a month-if you can get 0 percent financing, if you | | | | for the car you want, at an interest rate of 6 percent |
| don't have to buy insurance, pay taxes or pay an | | | | of 7 percent. The broader the range of numbers you |
| annual licensing fee. There are a lot of options--and | | | | run, the better you'll understand how important it is to |
| even pitfalls in financing a car. | | | | get the price you'll be paying down as low as possible; |
| Fast facts about financing:people have learned that the | | | | this number is far more important than the interest rate |
| sticker price on a car is negotiable, but they don't | | | | you pay)loans for new cars typically have a lower |
| realize that they can negotiate the interest rate being | | | | interest rate, but the difference usually is not enough to |
| quoteddon't accept anyone's first financing offer; | | | | be a major concern. These two rates are usually |
| negotiatebanks usually charge a higher interest rate for | | | | within one percentage point of each other, and the |
| car loans than other lenderspay cash if you can. It's the | | | | extra interest you pay on a used-car loan adds only |
| least expensive way to finance a car. Cash buyers | | | | about $7 to $15 on a typical monthly loan |
| are often asked if they're willing to make payment | | | | paymentdealers will bend over backwards to sell you |
| every month, because dealers make a substantial | | | | a car, and getting you financed is not only part of the |
| profit from car loansfront-loaded interest loans are | | | | process, it's also a huge source of profits; never forget |
| better for the lender because the interest you pay is | | | | this-even with terrible credit, most dealers will get you a |
| higher at the beginning of the loan. If you pay the loan | | | | loan because they want to make money off you by |
| off early or default on it, the lender has already | | | | selling you a car, then getting you a loanmany lenders |
| received a larger portion of the total interest on the | | | | and dealers will work with buyers who are considered |
| principal loan amountmost car loans are for 60 months, | | | | credit risks, but these loans have a much higher |
| or five years. Generally, the longer the term, the higher | | | | interest rate. Cleaning up any credit problems before |
| the interest ratethe total loan amount is the single most | | | | you buy your next car should pay off with a lower |
| important figure in your loan agreement, so work hard | | | | interest rate. |