Beyond A Bad Credit Car Loan The Additional Costs Of Driving A Car

Beyond a Bad Credit Car Loan: The Additional Costs of Driving a Car

Summary: It takes more than a bad credit car loan to put drivers with money problems behind the wheel. Learn about the additional costs of car ownership.

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Article Body: score below , you will be in the bad credit category. You can still get a car loan; youll just be charged a higher interest rate.

To offset the higher interest on a bad credit car loan, you need to do all you can to keep your payments as low as possible. Having a decent down payment or trade-in will help. Experts recommend putting at least % down to keep from getting upside down on your car loan. You can also extend the term of the loan. This will lower your monthly payment but you will pay more money in the long run.

If you are buying a new car, never pay sticker price. The sticker price or MSRPmanufacturers suggested retail priceis what the dealer wants you to pay for the car or truck. It is several hundred dollars higher than the factory invoice price, which is what the dealer paid. You can look up factory invoice pricing online. Remember, the less you pay for the vehicle, the less you have to finance with your bad credit car loan.

Besides your bad credit car loan payments, here are a few other financial figures you should be aware of:

Depreciation Depreciation is the difference between the MSRP of a new vehicle and what its worth at a later date. If you buy a new car for $, and it depreciates $, the first year, thats almost %. On most cars, the rate settles down to between % and % annually after the first three years. According to the U.S. Department of Transportation, the average life span of a vehicle is about years. Even if you keep your car only half that long, you will still have it for several years after you have paid off your bad credit car loan.

Tags and Taxes The purchase of a vehicle is subject to sales tax, unless you live in Alaska, Delaware, Montana, New Hampshire or Oregon, since these states dont collect sales tax. You will also have to shell out for title, registration, tags and emissions fees. These can add up to several hundred dollars depending on what you buy and where you live. You can roll all these up-front costs into your bad credit car loan.

Insurance Liability insurance is required in order to register a vehicle. Collision and comprehensive insurance is required by your lender to cover their investment. Your insurance rate will depend on the year, make and model of your vehicle and the deductibles you choose on your coverage. Other factors that influence your insurance rate are: where you live, your gender, your age, your marital status, and your driving record.

Fuel and Maintenance In , when AAA began doing their annual analysis, the composite cost of driving a car was cents a mile, and gasoline sold for cents a gallon. The composite cost per-mile in is . cents. Thats almost $,, if you drive a medium-sized sedan , miles. And this figure doesnt reflect the recent hikes in gas prices. Nor does it include car loan payments.

Pre-approved Car Loan One last piece of advice; get your car loan before looking for a car. Being pre-approved for your financing sets a realistic limit on your search. Knowing how much you can spend will also save you the embarrassment of finding a car and then discovering you cant get the financing.

Pre-approved auto financing can be secured quickly and easily online. One site specializing in bad credit car loans is www.fastcarfinance.com. They offer a no-obligation, free loan quote. Seeing how much you could be qualified to borrow is a good way to start shopping for the car of your dreams.