Vehicle Financing

Saturday, March 1, 2003

The Key To Vehicle Financing (NAPSA)—Formost consumers, the road to buying a new or used vehicle now starts with dealership financing, or leasing. If you’re among this group, understanding the ins andouts of financing agreements can help you steer clear of potential financial problems. Here’s a breakdown from the American Financial Services Association Education Foundation (AFSAEF): What Is Dealership Financing? Generally, dealership financing involves a buyer and dealership entering an agreement where the buyer agrees to pay the amount financed, plus an agreed upon finance charge, over a period of time. What Influences My APR? Your credit history, current finance rates, competition, market conditions and special offers are among the factors that influence your APR. Tips For Financing A Vehicle e Evaluate your financial situation. How much can youafford to spend each month? e Knowthedifference between buying and leasing a vehicle. Which is rightfor you? Compare annual percentage rates and financing terms from multiple sources, such as banks,finance companies and credit unions. Be aware that yourcredit history may affect the finance rate you are able to negotiate. Make your payments on time. Late or missed paymentsincurlate fees and reflect negatively on yourcredit. Talk to your creditorsif you are having difficulty meeting your payments. How Should I Prepare? Before you arrive at the dealership, do some research. AFSAEF offers a brochure, Understanding Vehicle Financing with a “Monthly Spending Plan” worksheet to help people determine how much they can afford to pay. Consumers can order a free copy of Understanding Vehicle Financing by calling (888) 400-2233. After determining your monthly finances, it’s a good idea to get a copy of your credit report so you check auto buying guides, the Internet and other sources to find out price ranges on the vehicle you want to buy. Finally, compare current finance rates being offered. What If I Encounter Financial Difficulty? A creditor or assignee may take the vehicle in full satisfaction of the credit arrangement or maysell the vehicle and apply the proceeds to the outstanding balance on the vehicle. If you are having trouble making payments, talk to your creditor. affect your finance rates. Also, www.afsaef.org. can correct any errors that may For more information visit

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