If you’re in the market for a Ford Explorer in Costa Mesa, you might be considering financing as a purchasing option. This is a common choice for many shoppers, since it allows them to pay off their car in monthly installments. However, if you are trying to keep costs low or do not have a strong credit score or history, this part of the purchasing experience can sometimes feel like a major hurdle.
Luckily, there are several tips and tricks for finding financing for your vehicle. Here are some tips to keep in mind while preparing for your purchase and driving away in a car that you can comfortably afford.
- Know Your Credit Score
Your credit score will have an impact on the interest rate that you receive on your car loan. If you have a low credit score, or little to no credit history, you might end up receiving a higher interest rate than someone with an established history or higher score. A favorable FICO credit score tends to be 700 or higher, though having a lower score doesn’t mean you’ll be denied a loan.
- Keep the Terms Short
Even though you’ll receive a higher monthly loan amount, choosing a loan with short term agreements will help you save money in the long run. When you stretch out your payment over several years, you’ll end up paying more in interest. Your Ford Fiesta in Costa Mesa might end up being worth much less than what you paid for it by the time your loan is paid off as well.
- Put Down a High Down Payment
When purchasing a car, try to put as much money down as you can upfront. As a general rule of thumb, you should aim for a down payment that is at least 20% of the total price of the car. This will help decrease your monthly payments and can also help you secure a lower interest rate.
- Pay Fees and Taxes in Cash
Whenever possible, try to pay for fees and taxes in cash instead of including them in your loan. While it might seem more convenient at the time, this will end up increasing the amount of money that you owe, as well as the interest that you need to pay.
- Consider a Co-Signer
For someone with little to no credit, it might be difficult to find a car loan without a sky-high interest rate. To increase your chances of finding an affordable financing offer, consider finding a co-signer who has a good credit history.
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