Many people approach the purchase of a new or used car as they would a large appliance. They need it, they shop around a few days, they sign some paperwork and the whole thing is done. That is, the purchasing is done. The payments will continue for up to five or six years! If you are going to be paying for something that long, it might be a good idea to take longer than three days to research and plan. Here is a step-by-step guide for creating a personal car financing plan that will help you get the best deal on the car of your dreams.
The Time to Dream
Your car financing plan should begin a year or more before you actually make a purchase. This is the phase of the plan where you are allowed to dream. This is when you spend hours online at car manufacturer websites, building virtual cars and reading reviews. You gather information and narrow down your choices. By the end of this phase, you should have a realistic vehicle choice that fits your budget and driving needs, but also delivers something that makes you happy. The added touch might be a color that suits you or an interior accessory you have always wanted.
The Time to Save
Once you know what car you want, you will also have an idea of how much it will cost. Choose a time you will purchase the car. Preferably, this time should be six or more months in the future. Choose a savings goal for a down payment. Divide that goal by the months or weeks until you will make the purchase and try to put away that much money each period. Do not worry if you fall a bit short in this stage of your car financing plan. The most important part of this stage is that you get some cash set aside.
The Time to Gather
A week or two before you are going to purchase your car, you should gather all the documents and information that are part of your car financing plan. This includes proof of income, such as last year’s W2 or a few of your latest payroll checks. You should also gather identification items and a list of information about your current debt, place of employment and previous addresses. Having this information on hand to complete your credit report will make the entire process easier.
The Time to Hunt
During the few weeks prior to your car purchase, you should be on the hunt for the perfect financing. As part of a car financing plan, you want to get the best possible interest rate and terms. One of the ways to do this is to look online for companies that offer pre-approved vehicle loans. myAutoloan.com is an example of a site that allows you to complete a single credit report and receive multiple online offers for financing.
Once you have completed the steps in your car financing plan, you are ready to visit the dealership and haggle for your new car. While a little luck never hurt, following a systematic plan will ensure you make the most of your purchase experience.