Marino on Money: April 5, 2011


    Buying a car involves two steps for most consumers: negotiating the deal and financing your purchase. Although many consumers take negotiating the deal seriously, they may forget that financing cars can also be a minefield. Here are three tips to help you successfully finance your new ride.

    1) Clean up your credit report before finalizing your car deal. Many credit reports are incorrect, and that can lead to a higher interest rate for you. Request your free credit report at, which is the only credit report endorsed by the U.S. Federal Government. is actually free.
    2) Don’t depend on the dealer’s financing arm. Although you want to hear about your dealer’s interest rate and payment terms, you should also check out your own bank or credit union. Openly share information about competing rates. Bankers may lower their rate if you give them the opportunity to compete. And many car dealerships can match whatever rate your bank is offering.
    3) Analyze the length of the loan closely. Think about how long you’ll own the car before you agree to finance terms. It’s best not finance a car for five years when you plan on trading in two. This is a big problem in the United States. According to auto research site Edmunds, nearly 25 percent of all cars are worth less than the balance of the loan. Ouch.

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    Of course, all of this work should coincide with proper budgeting. There are many auto-loan calculators online. Take time to learn how payment, final price, and length of loan influence each other. Do this before walking into the dealership, and hopefully, you will purchase a car you can afford.