Top 5 Things to Avoid When Financing a Car – CARFAX

Top 5 Things to Avoid When Financing a Car – CARFAX


Chances are, to buy a car, you’ll need to
take out a loan and make monthly payments. Here are the top 5 things to avoid when borrowing: #1: Avoid the Unknown Most people borrow from a reputable bank or
credit union but there are plenty of other lenders who want to give you quick, easy cash
and credit upfront. Of course, they don’t tell you that you’ll
pay dearly for it on the back end. Know who you’re doing business with and
their terms. #2: Don’t Go Long Loan repayment plans structured to keep your
monthly payments lower feel good in the short term, but can cause major pain down the road…
not to mention costing you a lot more in interest. There is nothing worse than a loan that drags
out too long and outlives your car. #3: Avoid the Killer Late Payments Constant late or missing payments can cost
you hefty penalties and lower your credit score. Keep up with your obligations – it will
save you in the long run. #4: Don’t Play Hide and Seek If you fall behind with your payments, make
sure you communicate with your lender. They can help you if you work with them – but
don’t think that the problem will go away if you ignore their calls and payment reminders. #5: Don’t Let Your Insurance Lapse If you are ever faced with a personal budget
crisis, don’t be short sighted and cut back on your auto insurance. If you owe money on your car then you owe
it to yourself to have your car fully insured in the event of an accident. Imagine making payments on a car you can’t
drive! There’s lots to avoid when financing a vehicle,
but done properly there are a lot of positives too!

About the Author: Michael Flood

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