If you are shopping for a high end vehicle and need to obtain luxury car financing that is affordable, you will need to take some time to research the various loan options that may be available to you. Luxury car payments can take a big bit out of your monthly budget and income; so, here are some tips to help you save money when applying for a luxury car loan.
When shopping for luxury cars, try to find models that are being sold with financing incentives offered by the manufacturer. Many car makers will give you the option of a rebate or a low interest rate (sometimes as lows 0%), and although rebates are nice, low interest rates will usually save you a lot more money over the life of the car loan.
The money that you put down on a vehicle, the less risks that the bank or lender has in that vehicle if you default on the loan or can’t make your payments. So, consider putting a substantial amount down on the luxury car and negotiating a better interest rate. Even if the bank doesn’t offer a lower rate, the extra money down will save you a lot of money in the long run with lower finance charges because of a lower loan principle amount.
Before you visit the dealership, visit a local bank or credit union and arrange your own financing. If you have an existing relationship with a local banker, then you may be able to get better rates than you could with the dealer’s finance companies.
Although you should always arrange your own financing before you visit the new car dealer, that doesn’t mean you shouldn’t let the dealer have a chance to compete for your loan business. Many times, the dealership has access to financing deals that they don’t always mention. However, if the dealership finance manager is aware that you are serious about saving money on the loan, and you qualify for better rates, they may be able to save you more money. Even if you reject the dealer’s financing, you still have the financing that you should have previously prearranged.
If you can afford the increase in monthly car payments, the you should arrange a shorter term for your luxury car loan. Most banks or car loan lenders will offer better rates in exchange for a shorter term loan. So, instead of choosing a long 72 or 84 month car loan, opt for a 36 or 48 month term that will usually have a lower interest rate. Car payments will be high; however, you’ll pay off the vehicle much faster and sa
ve a lot of money on accrued interest charges.
If you’re the type of person that likes to change vehicles every two or three years, consider a lease instead of a purchase. In general, lease payments are much less than monthly car loan payments. However, you should be aware that leases are only a good idea if you don’t drive your vehicle more than 12,000 to 15,000 miles per year as you may incur heavy fees and service charges for driving the vehicle too much.