Top Ten
Ways to Avoid Negative
Equity
10)
Fix any credit problems you may
have to receive a lower interest
rate.
I work for a car dealership
that handles a lot of sub prime
auto loans and it is not uncommon
for us to write contracts with
APR's as high as 24.99%. What
this means to the customer is a
finance charge that is upwards of
80% of their total amount
financed, i.e. amount financed
equals $10,000 and the finance
charge they will pay to the bank
is $8,000. That's a lot of wasted
money paid to the bank.
9)
Maintain your
vehicle.
Take care of your vehicle both
under the hood and cosmetically.
The better it runs and the better
looks equals better money when
you trade it in.
8)
Get top dollar for your
trade.
Check the Internet and local
publications to see what vehicles
like yours are selling for. You
won't get this money when you
trade it in, the dealer has to
make money when they resell it,
but it will give you a general
idea of what vehicles like yours
retail for. If you can sell it on
your own, you will always get
more money this way vs.
trading.
7)
Buy a vehicle that is easy to
resell.
Don't buy a vehicle there is
little demand for. For instance,
the purple VW Beetle with orange
polka dots. You may love it, but
most car buyers will be looking
for something a little more
conservative and it won't be
worth as much on trade in.
6)
Don't buy a new
vehicle.
In our current economy some
vehicles are losing massive
amounts of money as soon as they
are driven off the lot. For
instance, some trucks and SUV's
are losing 40-50% of their value
in the first few months on the
road. OUCH!!!
5) Do
your homework to find the best
possible deal.
The Internet is a wonderful
invention and affords consumers
the luxury of searching hundreds
of car dealerships and their
vehicles in a very short period
of time. The great thing is you
get to compare vehicles in the
comfort of your home with no
pushy sales people bothering
you.
4)
Finance for 48 months or
less.
This of course, is not always
possible, but some customers are
financing vehicles for as long as
96 months. That's 8 years! Don't
do it. A 72 month loan is the max
I'd ever suggest, but 60 or less
is a much better option.
3)
Put 30% or more
down.
Again this is not possible for
most customers, but if you are
able to save before buying it can
help immensely in the amount
you'll pay in finance charges. Do
you really want to pay interest
on your tax, title and
license?
2)
Pay more than your minimum
monthly payment.
If you can tack on an extra
$50 a month, or better yet double
your car payments, you'll find
yourself in a much more equitable
position much faster and pay a
whole lot less in finance
charges.
1) Do
not buy more vehicle than you can
comfortably
afford.
I know that here in America
it's hard to drive an EX when
your neighbors, Mr. and Mrs.
Jones are driving the super
deluxe LX model, but is it really
worth strapping yourself for cash
month in an month out for the
next 5, 6, or 7 years? Humble
yourself and you'll find life is
better when you have more
cash.
Justin Reynolds - Want more
free car buying tips? Visit
Justin at
http://www.InsiderCarBuyingTips.com
If you want to refinance your
current auto loan to lower your
interest rate visit Justin at
http://www.EZAutoLoanRefinance.com
it's fast, free and easy!
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