Auto financing: personal loan option?

Erin Arron: 2

Romana Stiman: 1

Marco Stolarz: Best way to avoid auto loan finance charges is to pay cash for the car. You save money till you have enough to buy the vehicle. Stringing out payments for more than 6 years was really bad. If you'd put more down or gone with bigger payments and shorter term, you would have saved a ton of interest. I hope you didn't roll any balance from your trade in into that new car loan.

Lawanna Livsey: The dealers "charging " high interest rates is because people go thru the dealer to arrange financing instead of doing it themselves. THe dealer simply writes the loan request and submits it to a bank/ lending institution. In return for sending the loan to the bank they get a percentage from the bank. This percentage is "hidden" in the interest rate the bank charges. One should always arrange their own financing before going vehicle shopping. That way they know how much they can spend on a "new" ( to them ) vehicle, and do! not get any surprises. This will also save them money in the form of a lower interest rate.Probaly the best way to finance a new vehicle is to use a home equity line of credit. It is usually a lower interest rate tehn a car loan. Problem is with the financial melt down recently all banks and lenders have tightened up their requirements and some banks even lowered the credit limit on home equity loans that had already been extended. So a home equity loan may be difficult to get right now.A personal loan has always been a higher interest rate than a conventional car loan. Best to get your car loan approved before shopping, . Do not tell the dealer you already have the loan as he may cut the price of the vehicle some expecting to get it back in the financing....Show more