Car Loan Payment
With the cost of car ownership going through the roof, with the increases in fuel and insurance costs it is becoming more and more important that the decision to become a car owner is not taken lightly. Therefore it is wise to look at the monthly car loan payment that the new car you are considering buying will have on your overall finances.
Car Loan Payment-The Cost of Car Ownership
The costs of car ownership are far greater than the monthly car loan payment quoted to you by the car dealer who you are considering buying a new car from. The reality of car ownership in the real world is that the other costs of running a car ca be equal to or even exceed the monthly car loan payment. before you buy you must take into consideration the total cost of car ownership.
Car Loan Payment-Car Ownership Costs.
- Monthly car loan payment.
- Insurance divided by 12. All finance companies will require that you have fully comprehensive insurance which can be very expensive.
- Taxes divided by 12. Even leased vehicles will have taxes which will be the responsibility of the end user.
- Monthly fuel and running costs.
- Estimated yearly maintenance divided by 12. Remember that you are responsible for regular servicing, tyres and brakes. Also if you have a deductible of say 500 on your insurance then you will be responsible for repairing any damage that casts less than 500.
Car Loan Payment-Monthly Car Loan Payments
With the high costs of car ownership other than monthly car loan payment in mind it might be a good thing to look at ways of keeping the monthly car repayments as low as possible. There are many options that you could consider other than a straight forward purchase loan.
Car Loan Payment-Car Finance Options to Consider
- Stretching out the period of the loan. Consider stretching out the financing period form 36 months to 72 months, this will decrease the monthly car loan payment significantly and though you will end up paying more in interest payments over the life of the loan the lower monthly payments will be much easier on a stressed out budget
- Lease instead of buying. With a lease you only pay for the period of time you have possession of the vehicle typically three years, when the term of the car lease is up you simply give the car back to the leasing company. Because you are not going to own the car at the end of the financing period the monthly lease or car loan payment will be far less than those for a conventional car purchase loan.
- Take out a home equity loan. If you own a home with equity in it, it might be worth considering taking out a home equity loan to buy a new car. The payments will be stretched out and will therefore be less than even a 72 month car loan.
- Refinance your home loan. If you have other debts like credit card and store cards and you would like to buy a new car but are tight on cash because of all your monthly payments and option you could consider is to refinance your home loan and consolidate all of your existing debts into it plus the cost of your new car loan payment. This process will leave you with one manageable monthly payment, it will also get rid of high interest credit card payments and also you will be financing your new car over the life of your new mortgage.
- Make a large down payment. If you can afford to make a decent down payment this will lower your monthly car loan payment significantly.
- Check the Fine print. Read the fine print to see that the financing does not include large back end fees that will cost you substantial sums every month.
Car Loan Payment-Car Loan Payment
Buy what you can afford. In the end you will be well served to ensure that you total up all of your necessary monthly payments including the cost of you new car loan payment and balance them against your monthly income to ensure that you ore not overstretching your finances.
