Financing is a fantastic way to get the car you need without having to pay for it all at once. If you have never financed a vehicle before, there are errors you’ll want to avoid, and our Mazda financial services department goes over some common ones.
Putting Up Too Little – or Too Much – of a Down Payment
Ideally, you should aim to supply a down payment that’s 20 percent of the sale price. Doing this can really shrink the amount of money you will need to borrow, and this will help lower your monthly payments and perhaps pay of the loan faster. While you may be tempted to put down more money, if this results in draining your savings, this is a bad idea.
Choosing the Wrong Loan Term
If you’re like a lot of people, you’ll probably want to pay off your car loan as quickly as possible. While going with a short term – like two years, for example – will certainly do that, this will create big monthly payments. A four-year term will make them much more reasonable. And while a longer loan will reduce them even further, you have to be aware of the interest that will pile up.
Picking a Car Above Your Means
Perhaps the most important thing with financing is to not overextend yourself. While you may be tempted to choose a car with all the bells and whistles, if it’s not within your budget, this will end up being a costly error. A good rule of thumb to follow is to use no more than 10 percent of your income on all car expenses.
If you’re ready to finance, the team at Freysinger Mazda makes it easy. You can get started now by filling out our online application.