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You Auto Know: Adventures in Paying Off a Car Loan

Posted on September 22, 2008

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Who in here needs a new car or has already bought one? I just recently purchased a new car despite HIGH gas prices — I didn’t want one but I needed a new one. Trust me, I would’ve driven my ‘99 until the wheels fell off!

Oh, yeah I even bought new tires before I decided to get rid of it. Lol…

When I was looking for my car I made sure that I was pre-approved from my credit union before I started shopping for it. I didn’t want to be hassled by the auto industry about interest rates, pricing, and all the billion, ga-zillion paperwork fees. So that’s why I did all my homework first before I went to the dealership.

I got approved and researched the different types of cars for safety, reliability, costs, etc… inside Consumer Reports magazine and at nadaguides.com. I also visited the websites of the car manufacturer and the specialized dealer.

I had a mental plan on what I wanted, how much I could afford, what I could actually afford to pay monthly — including insurance payments — and how much my trade in was worth.

Oh you better believe I called my insurance agent and asked how much it would cost me and if I qualified for any discounts. : )

So I went in and spoke with my salesman, test drove my potential new car, and left the lot with him thinking about how to sell me that car. The worst you can do is to sound needy and eager to purchase. That’s what they want to hear so they can psyche you up to impulse buy.

The salesman called me every week to check in, yet I was not budging until he agreed to take my offer. I didn’t plan to tell him about my trade-in until I was ready to sign the paperwork or until we came to an agreement on price. I did tell him that I would love to buy locally and keep the money in our state, but that I would buy out of state if I were offered a better price.

About a month and a half later I finally purchased the car for the price that I was willing to pay — with all the accessories added — and I left happy. Now I have a monthly car payment that I am not concerned about since it’s exactly what I budgeted for. Woo-hoo!

This is so cool…Did you know that you can actually reduce the interest paid and pay your car off sooner by setting your payment up on a twice-monthly basis? Here’s an example:

Say, for example, your car payment of $350 (6% rate 60mos) is due at the end of each month. So if you set your payment schedule to pay $175 on the 15th and the other $175 on the 30th, you will reduce your interest paid by at least $273 and shorten your term to 55 months!

What are some of your car buying stories? Have you ever been played by a salesman or do you stay strong until you get what you want? Talk to me, people — I wanna know!