There’s a right way and a wrong way to finance a car — hopefully, you’ll choose the right way to finance. There are a few key components to financing a new or used car correctly, including double-checking your credit score before going to the dealership. Whether you’re intending to visit one of our Ford dealers in West Valley City, Utah or browsing the latest 2016 Ford Edge, here are a few pointers on how to finance your next vehicle the smart way.
The Impact of Your Credit Score
Your current credit score will play a major role in financing rates for which you will be eligible. If you’ve catered to and fine-tuned your credit to achieve a perfect score, you’ll be eligible for some of the best financing rates. If your credit is average, it might benefit you to call several Ford dealers ahead of time to see what kind of financing rates they offer. Even if your credit is average, most local Utah banks or Ford dealers will still offer competitive financing.
Don’t Skip a Down Payment
After you’ve found out what kinds of financing rates you’re eligible for, assess how much you can logistically pay on a down payment. You can avoid an undesirable situation of owing more than you can pay by putting a good chunk of money down — ideally 20 percent. It’s considered financially risky to not put down any kind of down payment on a car, no matter how good your credit score is. Should you ever need to sell the car, a larger down payment ensures that you don’t end up owing more than the car is worth.
Pay Extra Expenses With Cash
When purchasing a new or used car, there will always be miscellaneous expenses such as sales tax, documentation fees and registration fees. Although it’s tempting to roll all of these fees into financing, consider paying for some of these extra expenses with cash. With the money you’ll save, you’ll be able to take that road trip through southern Utah or down the West Coast — in your newly, smartly-financed car.