How to save money on your next car loan

After buying a home a car is the next biggest purchase you will make in your life. Cars are by far the most expensive to up keep and to replace. You need to shop for the lowest priced car loan (interest rate) that you can find.

In many cases the interest rate will depend on what the lender thinks of you, this goes for dealerships and banks the same. You will be graded on different criteria.

Your work history - how often have you changed jobs, how long you have lived at your present residence and how you have paid your debts in the past. These all show what type of character you have as far as the trust factor goes.

Then they will look at how much you earn, and your overall debt load.

After this your assets and liabilities are reviewed, basically your net worth.

They will also ask you what you are willing to put up as collateral.

All of the above affect your credit rating and the interest rate they are willing to give you on your car loan. (go here to read more on how to repair your credit )

If possible make a down payment of at least 20% and finance the rest for no longer than four years. If you make a small down payment on the car and finance for 5 or more years, you will end up owing more than the car is worth.

This creates a problem when you go to refinance or trade the vehicle in for a new one. With a one year shorter term car loan you can save almost 4000.00 dollars at the end of the term.

One way to save on vehicle loans is to opt in for more frequent payments. Pay bi-weekly or even better weekly payments. Another way to reduce your interest costs is to apply for a line of credit instead of a specific car loan.

If it is a very expensive car you may want to ask the bank about buy back loans. They work almost like leasing and is a way you can get a luxury car.

In all cases, shop around for car loans online, at your local bank and at car dealerships. Every wants your money and business and should be flexible to a certain degree on the interest rate.