Ways to finance a car

As some of you may know I’m currently in the process of buying a car. There a several ways to finance one, but your financial situation will help determine which way is best for you. I bought my first car when I was 18 years old. It’s actually kinda funny, because my parents bought me a brand new car when I was 18, but it wasn’t a car that I wanted so I went and bought another one and gave the one they bought me to my sister ( yeah I know, some of you are probably thinking spoiled brat.) Well let me start off by saying I was far from spoiled, in fact, I worked very hard for everything I had, and I knew what I wanted so I decided to get it. At the time, I think I had one credit card through Capital One- they pretty much loan money to anyone-so my credit was brand spankin’ new. I was going around visiting a ton of different dealerships trying to get approved for a car loan. Little did I know- cause no one gives you a guide to how credit works- that running your credit at multiple places actually looks really bad.

After maybe about 6 rejections I decided to cool it on the car shopping and build my credit up a little more. I went back a couple months later and that did the trick!  I was approved for a $15,000 loan through a small credit union and I bought a used 2006 Volkswagen Jetta. I kept that car for a little over a year before I traded it in for a brand new 2011 Kia Forte. This car was everything that I wanted. Too bad it was totaled a year later (by no fault of my own.)

Now back to the financing piece; because I needed to buy a new car, yet again, I decided to apply for a car loan directly at the bank because they were offering really good rates. I was approved- obvi this time I’m a car buying expert- ,and it was time to get shopping. The reason why I found financing prior to shopping was so that I would know the limit I could spend before even going in. It’s easier for me to start with the max budget that I’m approved at versus finding a car that I love and seeing if a bank will finance that amount. This way there are no surprises, however the downside is that you are more limited because you already know what you can spend.

I’m now in the process of  having to buy  yet another car because my Mazda was totaled (I know, really bad luck with cars) but prior to even shopping I secured my financing through the bank again. I belive this is the smartest way to shop, but it’s also not for the weak minded. You have to be very firm at dealerships, because they WILL tell you that you need to run your credit again “as a formality” (puhhleaaaseee) and if you see a car you like that is over your budget they WILL try to get you financed somewhere else for more money (don’t fall for it.)

Stay with what makes you comfortable and remember that they want to sell you the most expensive car they can. I don’t suggest being rude or mean because salesmen are people too, but be upfront about your financing and what you are and are not willing to do. I’ve been shopping for a car for about 2 weeks now and my experience has been okay.Nowadays majority of car lots have turned into what they call “no haggle” basically meaning they don’t negotiate on price and I’m looking for a sweet deal. What happened to the good ol’ days of bargaining? No one wants to go toe to toe anymore and fight for a great deal. Apparently, from what I’ve been told, people have reported they would rather shop the no haggle method instead of going back and forth trying to negotiate.

What do you guys think?

    amanda again



    • 09kierra@gmail.com
      May 19, 2015 / 6:47 pm

      thanks girl! Yes unfortunately credit is like everything. I really wanna buy a condo by the end of the year so I’m starting to work on mine right now. Luckily I plan on being a boss and hopefully I’ll just make enough money one day where I can say forget credit, I’m dropping cash!

  1. May 19, 2015 / 5:21 pm

    Hmm… Maybe I should look into financing instead of (ever so slowly) trying to save up thousands of dollars. I’m looking to buy my first car and have no clue of what I’m doing so this post was a refreshing and much needed read for the day.
    Also, what exactly is bad about running your credit at multiple places?

    • 09kierra@gmail.com
      May 19, 2015 / 6:48 pm

      It’s bad because it looks like your “shopping around trying to get financed somewhere because your not getting approved at places that you’ve been to previously. Every time someone runs your credit it’s a hard inquiry on your credit report which impacts your score. Typically trying to get financed for anything=a hard inquiry so you want to be careful with how many places you go to. People will always try to run your credit because they want to finance you because to them it equals revenue so be bold and stand your ground with telling people no. Goodluck!

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