Easy credit and longer-term loans currently being offered at auto dealerships can make buying an expensive car alluring. Greg McBride, chief financial analyst at the Bankrate.com website, says consumers with poor credit shouldn’t bite.

Consumers tend to focus on the payment rather than the interest rate, which likely will be far higher than the below 3-percent rate now available to those with good credit.

“They engage in the dangerous financial habit known as payment shopping,” McBride says.

Here’s what he suggests instead.

— Buy a lower-priced car or a used car with a shorter payoff period. Paying it off will help you get a lower interest rate on your next car.

— Don’t be fooled by the payment on a loan that’s six years or longer. Look at the interest rate, which could be double or more what borrowers with good credit can get. It will take years for you to build any equity in your car.

— Don’t buy a car until you pay down other debts and improve your credit rating.

— Try to save for a bigger down payment. This could get you a lower interest rate.

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments

Leave a Reply

Please log in using one of these methods to post your comment:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From CBS Tampa

A Florida Gator Leaves School Early For NFL DraftHis size, strength and quickness have NFL scouts projecting him to be an early round pick.
It's a Date | November 2017It's a Date is our monthly calendar created to help you keep up with everything Tampa Bay has to offer!

Listen Live