Fall in Love with Help from a Car Payment Calculator
Richard BarringtonLoanBiz Columnist
One way people get
themselves into financial trouble is by setting their sights on owning a
certain car before seeing if they can afford it. Once the heart is set on
something, emotion takes over and people run the risk of justifying an auto loan
they can't afford. Buyers who use a car payment calculator to determine what
size auto loan fits their budget can then shop for a car without having to
agonize between logic and desire.
Putting the Cart before
the Horsepower
Falling in love with a car is an American tradition--it's
why style, image, power, and luxury are such big parts of how cars are sold. In
fact, a basic rule of sales is to never mention price until the prospective
buyer has made up his or her mind.
The way people generally shop for a car plays right into
this sales tactic. People see a car on the street or watch an advertisement and
decide they want one of those cars. They have fallen in love. Only then do they
ask the question "what does it cost?" Even if the answer is more than
they expected, they are inclined to believe they can afford that number--after
all, what's a few dollars where love is concerned?
At this point, consumers not only have let desire triumph
over logic, but they probably haven't even figured out what that price means in
terms of a monthly payment. In other words, they've got the process backward--deciding
to buy something before knowing if they can even afford it.
Love Might Be
Eternal, Auto Loans Shouldn't Be
Auto purchasers should beware of another danger-- focusing
exclusively on the payment rather than the vehicle's price. Car loan terms have
been stretched out to six years and longer in order to make the payments more
attractive to buyers. Experts warn that low down payments and longer terms can
cause buyers to become "upside down" on their car loans almost
immediately. They recommend that borrowers don't take a loan with more than a 4
years term, and never get a loan with a term longer than they plan to own the car.
For those already in a long-term car loan, experts advise them to consider
refinancing into a better auto loan.
Getting the process right from the beginning involves researching
auto loans first. An online car payment calculator shows what the car payment
is depending on interest rate, length of the loan, and the loan amount. It
helps borrowers see how much car they can buy while staying within their
monthly budget. They can then shop for affordable vehicles.
There is a wide range of vehicles in every price range. Even
by narrowing the field, auto buyers still have plenty of opportunities to fall
in love. What's most important is that even if that first love fades, buyers
end up with a car and an auto loan they can live with.
About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.
