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5 smart strategies to finance your car

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When you are looking to buy a car, the last thing you want to do is damage your credit score. A high credit score is essential for many reasons, including getting the best interest rates on mortgages and other loans. We will discuss five ways to finance a car without hurting your credit score. Read on to learn more.

1. Make an agreement with the reseller

There are ways to buy a car from a dealership without financing, and one of these options is to work out an internal loan. Many dealerships will offer you an internal loan if your credit score is good. An internal loan allows you to pay off the car within 36 months without interest. It’s a great way to keep your credit score healthy and still buy a new vehicle.

2. Buy a used car with cash

Buying a second-hand car can be helpful in keeping your credit score healthy because it prevents a long-term car loan from being added to your credit history. This is because it takes a vehicle only four years to significantly affect your credit score, while any more than six years will begin to decline rapidly. Also, buying a used car for cash allows you to get more for your money as it will depreciate at a lower rate.

3. Use a credit card that offers low interest rates

Another way to finance a car while keeping your credit score healthy is to use a zero percent interest card through a major provider like Chase or Discover cards. Both provide excellent options for financing a vehicle in 12 months. This is an ideal way to finance your vehicle while keeping your credit score healthy. You are only charged interest on the remaining amount at the end of each month rather than accumulating it over the entire twelve months.

4. Get pre-approval for funding

Many people apply for a car loan only to be turned down later. These people may not realize that this can damage their credit score. You should allow lenders to review your financial background before applying so that you can get pre-approved. When you are considered for a loan before using it, your chances of being approved are much higher.

5. Avoid retailer add-ons

When buying a vehicle, many people forget the additional costs they accumulate when they leave the lot. One of these costs is the reseller add-ons. These are the fees that the dealership applies to the price of your loan without your knowledge. While they may seem like just a couple of dollars, they can cost hundreds or even thousands of dollars when you sign the contract.


Keep these tips in mind when financing a car and it will be easier to keep your credit score healthy. By following these steps, you will have a better chance of getting the vehicle you want and avoid damaging your credit score.

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