How Extended Financing Can Help You
Car financing as a whole can be extremely confusing, especially to those who aren’t too familiar with the car buying process. There is always a lot of paperwork to go through, and many financing options so it can feel overwhelming not precisely knowing where your money is going. If you’re in the market for a new car and are concerned about saving as much money as possible now, extended financing is a great option that can help you get back on track while being able to get a quality car that will last for years to come.
1. Extended Financing Gets You a Nicer Car
It sounds too good to be true but it’s not. Short-term loans have benefits of their own, but that also means that a potential buyer will have to pay more upfront, and don’t have much room to haggle any deals. There have been many cases where a buyer couldn’t afford to buy the most basic Honda on a three-year loan but by investing in the long-term financing option, they were able to afford a top tier edition because they didn’t have to pay as much on their down payment and their monthly bill was much lower. To be able to achieve this, make sure to really look over your budget, consider what is the most expensive car you’d be able to afford, and how it compares to a finance plan.
2. Secure a Lower Monthly Payment
The biggest reason people go towards the extended finance option is to get a lower monthly payment. This is perfect for those that know they need help with their credit and have a certain amount to spend every month. Having a set, low payment will also prevent you from getting your new car repossessed because managing a higher payment was harder than you anticipated.
3. Better Handle of Your Budget
Before even thinking about buying the car, you’ll want to study your budget. If the car you’re planning to buy is logical for your price range and your budget can handle either a three-year loan or a seven-year one, you can afford to invest in the extended financing option. By doing this, you can easily leave yourself a few hundred dollars a month to put to save or put towards other bills. The only issue here is to not get caught up with extra spending, and then find out that you can’t pay your monthly car bill!
4. More Lenders to Choose From
Having various lenders to choose from is especially important if you don’t have the best of credit scores and are limited on what you can afford to put as a down payment. There are many second-chance lenders that help give potential buyers a way to finance a car by using the extension as a contract that they will be responsible and pay the car off on time every month. As long as they do this, they can put down a minimal amount and will only have to provide different information for verification such as a place of employment and pay stubs. Going through one of these lenders is also a great way to rebuild your credit so you can spend more with your next car purchase!
5. Down Payment Affordability
Dealers want to sell you a car for the best price possible, so if you know that you will be doing extended financing, you have the ability to haggle for a down payment price that works better for your budget. There are many dealers that are now offering as little as $0 down to finance a car to help those who have been impacted by the pandemic’s effects. If you know you need a car as soon as possible and can’t afford to put too much down, you’ll want to start asking your local dealers about their down payment options and how they can work with you budget if you invest in an extended financing contract with them.
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