Avoid Auto Loan Mistakes and Save Money on Your Next Vehicle

May 20, 2015

Shopping for a new or used vehicle at El Paso car dealerships is often fun and exciting for most people. They are getting rid of an older vehicle and getting a brand new or “new” used car. Many people get caught up in the moment and are eager to take their new vehicle home once they have test driven it and are sure they want it. Frequently, where mistakes occur is during the financing process. The following are general tips to help avoid making these mistakes and help you save money on your next new or used vehicle over the life of the car loan.

Take an objective friend along to the dealership. Having someone there with you who remains objective can help prevent you from getting too caught up in the moment and making a mistake.
Negotiate on the purchase price, not the monthly payment. Where many people make a mistake is negotiating on what they can afford in a monthly payment, rather than the actual purchase price. Negotiating on the monthly amount is never a good idea, since it disregards the true purchase price of the vehicle. Break the process down into three separate steps: purchase price, trade-in allowance, and lastly, financing.
Know your credit score before you shop for a car. Take the time to get your free annual credit reports to ensure they are correct. It is worth paying for the credit score, if it is not included as well, so you know your current rating. If there are problems, fix them before financing a vehicle. A one percentage difference in interest on a car loan can save you hundreds of dollars over the life of the loan.
Choose the best incentive offer. Deciding between a low interest rate and cash back can be difficult. Where many people err is taking the cash back, even though they could get the low interest rate. Take the time to compare your options. Having a lower interest rate may save you more money in the long run, than the amount of cash rebate being offered.
Avoid going upside down on a car loan. When you trade in a vehicle and owe more than it is worth, the extra amount is added onto your new car loan. Not only are you paying interest on the cost of the new car, but also the remaining balance on the vehicle you just traded in.
Pay for upgrades and add-ons out of pocket. If possible, rather than finance extended warranties, service contracts, and other options and upgrades, pay for them separately. Even though they can be included in financing, you end up paying interest on the additional amount.

By taking the time to smartly finance a new or used vehicle from your El Paso Kia Dealership, you potentially can save hundreds or even thousands of dollars over the life of your car loan. To learn more about vehicle financing or current incentives, feel free to stop by Integrity Kia or call us at 915-856-2982.