Before you finance a vehicle, you should be asking lots of questions -especially of the dealer or finance company you're buying from. Though you should be asking yourself plenty of questions as well, make sure you don't get swept up in the excitement of buying a vehicle without getting your concerns answered first.
Four Questions You Should Ask The Dealer Before You Sign
What kind of financing am I getting?
Car financing deals used to be really straightforward loans covering the balance between what you're putting down as a down payment and what the vehicle costs. Obviously, we all hope that it's still that clear cut, but the world of finance can be more complicated. You have other options, usually to help those who need financing but have bad credit, like loans with large balloon payments at the end and leases. Your first question when a dealer is quoting you a monthly price should be how much the down payment needs to be that is allowing for and what type of financing
Will I own the car at the end of the loan?
Make sure that you ask your dealer if you will own the vehicle at the end of your loan term and whether or not you'll need to pay a lump sum at the end to have full ownership. Knowing this should help you decide whether or not the payments and amount are worthwhile in the end.
What are the terms of the loan or lease?
If you've decided to go with a different kind of financing, make sure you know the fine print. With a lease, you'll likely have a limit on the miles you can drive without a penalty. That can also be true of a loan with a balloon payment at the end. Basically, if there's a chance you're going to have to turn in the car at the end of your financing term, you need to know what you can and can't do. Pro tip: make sure you know what condition the interior needs to be in. This might prevent those red popsicle summertime nightmares if you know you're going to have to pay for that little mistake in more than just regret.
What happens if I can't pay?
We don't like to think about things taking a turn for the worse, but things can and do happen. Make sure you know what happens if you find yourself in financial difficulties and are unable to keep up payments, especially if you're taking out a lease where you'll never have any ownership in the vehicle.
Financing a vehicle can be an easy way to get what you need when you need it. You don't need to be afraid of the process. Just make sure you ask the right questions of the right people and be honest about your needs and resources.