Car News Articles 
 Alternative Fuel Vehicles
 Automotive Articles
 Car Buying Tips
 Car Financing (29)
  Car Warranty (5)
 Car Insurance Articles
 Car Maintenance
 Car News
 Car Racing
 Car Repair
 Car Safety
 Driving Economically
 Environmental Issues
 Exterior Car Care
 Garage Know How
 How Car Stuff Works
 Motorcycle Articles
 Road Trips
 Traveling with Kids
 Younger - Older Drivers
 Amsoil Synthetic Oil
 Article Archives

Car Buying Tips >> Car Financing

Survey Shows Car Buyers Are Shifting Vehicle-Shopping Strategies Study Reveals More Comparison Shopping for Loans, More Budget Planning

(ARA) - With interest rates on the rise and purchase incentives declining, a new national survey reveals that today’s car buyers are steering their attention more sharply toward the financing arrangements for their vehicle purchases, including more loan shopping and budgeting compared to last year’s buyers.
The survey of more than 1,000 recent and prospective auto buyers commissioned by Capital One shows consumers plan to be more rigorous loan shoppers. Among consumers planning to purchase a vehicle in the next year, 57 percent say they will comparison shop for car loans through multiple financing sources before buying, up from 37 percent of those who bought a car in the past year.

“The Federal Reserve has raised interest rates eight times since last June, and manufacturer purchase incentives have fallen six of the last nine months,” said Diana Don Colby, director of financial education at leading financial services company Capital One. “Shopping for loans before you buy has always been a smart idea, but with rates climbing, it’s become even more important.”

Today’s car buyers also say they plan to be more disciplined budgeters. According to the survey, 84 percent of those planning to buy in the coming year say they plan to develop a budget for their purchase, compared to 65 percent of buyers from the previous year.

The study also found that those preparing to buy a vehicle in the next year appear more likely to view financial aspects -- such as their loan and purchase price -- to be the most important part of their buying experience. Approximately half (49 percent) of consumers planning to buy in the coming year ranked financial issues as the most critical areas of a satisfying transaction, compared to about one-third (32 percent) of those who bought in the last year.

“People who overlook their car loans are making an expensive mistake,” said Jack R. Nerad, editorial director of Kelley Blue Book’s “The difference of just two percentage points on your APR can either save or cost you about $1,400 over the life of a five-year, $25,000 loan. There are some excellent resources available to help consumers shop for car loans, but many people don’t know where to begin.”

Kelley Blue Book and Capital One offer the following tips to help keep car buyers on track to a smart deal on their next vehicle loan.

* Set a realistic budget. Choose a vehicle that won’t overextend you financially. A general rule of thumb is that no more than 15 percent to 20 percent of your total monthly budget should go toward all of your car-related expenses.

* Verify your credit record. Order a copy of your credit report to ensure it’s accurate and in good shape. Correct any errors before applying for a loan.

* Comparison shop for loans. Check out credit unions, banks and online lenders to see what rates are available in the market, so that you know a competitive rate when you see one.

* Arrive with financing in your pocket. Having approved, no-obligation financing in hand gives you a competitive advantage when you go to buy, giving you the power of a cash buyer. If the dealer offers a better loan rate, you can take it with no penalty.

* Approach your purchase as three transactions. It’s best to treat each part of the purchase separately: 1) financing; 2) trade-in; and 3) vehicle purchase. This will simplify the process and maximize your negotiating opportunities.

* Match length of loan to expected length of ownership. Select your loan term based on how long you plan to own the vehicle. Buyers who take out longer-term loans can find themselves “upside down” on their loan (owing more money on the car than it’s worth in trade).

* Review your financing terms carefully. Make sure you know your interest rate, monthly payment, amount you are financing, the length of your loan and your trade-in value.

Courtesy of ARA Content

Related Articles:
Getting a Good Deal On A Bad Credit Auto Loan
Would I Qualify For A Bankruptcy Auto Loan?
Auto Refinancing Puts Gas Money in Your Pocket
Financing Your Next New Car
Shopping for a Used Car Loan
Clean Up Your Credit For A Better Auto Loan Rate
Refinancing Your Car Loan
Refinance Car Loan
Car Finance Loan: When You Can't Just Wait to Buy a Car
Three Steps to Saving Money on New Car Financing
Using An Online Car Loan Company
You Can Get An Auto Loan Without A Credit Check
Looking For A Great Auto Loan Rate
Save Money By Refinancing Your Auto Loan
There is A Car Loan Out There Just For You

make image
model image
zip code

Stay Updated!

Car Financing
Related Articles
Spring Car Shopping? Take Care
Car Credit And Financing Facts
Before Applying For Auto or
Car Financing Tips To Know
Car Loan Calculators
Getting a Good Deal On
Would I Qualify For A
Auto Refinancing Puts Gas Money
Financing Your Next New Car
Shopping for a Used Car
Clean Up Your Credit For
Refinancing Your Car Loan
Refinance Car Loan
Car Finance Loan: When You
Three Steps to Saving Money
Using An Online Car Loan
You Can Get An Auto
Looking For A Great Auto
Save Money By Refinancing Your
There is A Car Loan

Feed Button

Car Insurance Info | Newsletter | Car Classifieds | Online Car Rentals
Auto Pictures | Link To

Complete List of Article RSS News Feeds

Copyright © 1999 - . CarJunky® All Rights Reserved.