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10 STEPS TO BUYING A NEW CAR

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Step 7: Find Financing, Warranties and Insurance

Financing Your Vehicle
With the buzz surrounding zero-percent financing deals, you may have the urge to rush to your dealership to apply for that terrific interest-free loan. Unfortunately, what you may find is that, along with roughly two-thirds of all other consumers, you may not have a sufficient credit rating that will qualify you for the loan or the offer. The alternative will be a different loan at a higher interest rate. At that point, the excitement of driving off the lot immediately may tempt you to take that higher interest rate, just so you can have that shiny new car. You should resist that temptation.

Additionally, a credit rating that is far below-par indicates a person who has had difficulty making payments in the past, and that increased risk to the lender is reflected in the higher interest rate to the borrower. Remember, it's always wise to shop for the lowest-interest car loan before you make the deal. But if your credit rating is not good, you shouldn't be shopping for a new car in the first place.

If you have a good credit rating, be sure to check what finance incentives the manufacturer is offering. But be aware that many interest-free financing offers may require shorter terms, which will result in higher monthly payments.

As tempting as a dealer's discount financing may seem, don't overlook deals from specialized providers such as RoadLoans.com. Our preferred lender, RoadLoans.com, puts you in the same position as a cash buyer, ready to purchase upon arrival at the dealership. When you walk onto the lot with financing in place, you won't face the same obstacles because you've done your legwork in advance. And since there's no obligation until you buy the car, you can assess your purchasing options against the dealer's best offer. Visit the finance section to learn more about smart financing.

With low interest rates, an array of incentive options and the competitive advantage of online financing, you have more tools than ever at your disposal when it comes to making a smart vehicle purchase.

Warranties
Chances are, an extended warranty or service contract will be offered to you when buying your next car. An extended service contract backed by an auto manufacturer is usually your safest bet. These contracts encompass a wide range of repairs and services. The repairs can be done at any authorized dealership and tend to be approved without a hitch. You won't pay a penny for approved repairs unless your contract includes a deductible.

An extended warranty from an independent company could cost less than an extended service contract from a manufacturer. But the quality of this kind of contract varies widely from company to company. Shop carefully.

Insurance Rates
The truth is, automobile insurance is a necessity. Several states require all vehicle owners to have insurance and be able to show proof of it.

The type of vehicle you choose and the history of your driving record can have a profound effect on the cost of insurance. Typically, sports cars, high-performance cars, turbocharged or supercharged vehicles, those with larger engines and vehicles with four-wheel drive often result in higher insurance rates. Also, vehicles with histories of being stolen can demand a premium.

Since it always pays to shop around, check rates with your insurance company before you buy your new vehicle, then quote & name your price with Progressive online to compare.

These additional expenses may be unavoidable, but they can also be negotiable and should be reviewed carefully before making your next purchase. As a result, you could save yourself a lot of money and aggravation in the years ahead.

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