Easy credit and longer-term loans currently being offered at auto dealerships can make buying an expensive car alluring. Greg McBride, chief financial analyst at the Bankrate.com website, says consumers with poor credit shouldn’t bite.
Consumers tend to focus on the payment rather than the interest rate, which likely will be far higher than the below 3-percent rate now available to those with good credit.READ MORE: Black Restaurant Week underway in Atlanta through August 14
“They engage in the dangerous financial habit known as payment shopping,” McBride says.
Here’s what he suggests instead.
— Buy a lower-priced car or a used car with a shorter payoff period. Paying it off will help you get a lower interest rate on your next car.READ MORE: Trump says he took the Fifth in questioning in New York Attorney General fraud investigation
— Don’t be fooled by the payment on a loan that’s six years or longer. Look at the interest rate, which could be double or more what borrowers with good credit can get. It will take years for you to build any equity in your car.
— Don’t buy a car until you pay down other debts and improve your credit rating.
— Try to save for a bigger down payment. This could get you a lower interest rate.MORE NEWS: Clean air advocates urge Georgia school systems to apply for school bus rebate funding
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