Getting ready to buy a new car? You’ve probably already started searching for your new ride. Perhaps you have searched the internet, compared prices, researched dealerships, and even taken the car on a test drive. Now comes the fun part – completing an application, paying for the car, and driving off. This is where a lot of first-time car buyers mess up. Believing that all is required is the documentation to be approved for a car loan, they show up without cash and have to wait to drive off in their ride.
You Owe the Dealership
Whether you get approved for a car loan online or through the dealership, the loan doesn’t cover all the costs you’ll have to pay. There are a few other things you’ll owe the dealership before your deal is etched in stone.
- Down payment – Most loans require the borrower to foot part of the cost of the car before they’ll pitch in. This is known as a down payment. Depending on your credit history and the lender you’ve chosen to work with, you could have to pay as much as 10-20% in cash to the dealership. This reduces their out of pocket costs and shows your “good faith” to pay the remaining balance on the loan.
- Motor Vehicles – In order for the car to be driven without getting in trouble with the police, you’ll need to have valid license plates and registration. The dealership usually applies for this for you but will require you to pay for it at the signing. It can range from a few bucks to a few hundred bucks depending on where you live.
- Sales Tax – Unless you happen to live in the few states that don’t have sales tax you’ll be paying anywhere from 5%-10% on the price of the car to the dealership.
- Dealership Fees – There are other fees you may have to pay the dealer. This can include loan preparation fees, trade-in fees, and other miscellaneous costs.
- Car Insurance – You aren’t allowed to leave the lot if your car isn’t insured. Until the loan is paid in full this will be a requirement not only of the state and federal government but of your lender.
How to Cover it All
You didn’t realize just how much you would need to buy a car, did you? Even if you happen to get approved for a great promotional offer, there will still be expenses that the loan won’t cover. As you’ll need a large sum of cash at your disposal, here are a few tips to help you get the cash fast.
Personal loans – Need a bit of extra money? There are products like Blue Trust Loans quick personal loans you can apply for online. Your credit status doesn’t matter, you don’t need any collateral, and if approved you can have the funds in your checking account within 24 hours.
Purge – Spring cleaning may not be what you had in mind when you thought about buying a car but it can help you earn some quick cash. Go home and look in each room to see if there are things you no longer have a use for. Take photos and post the items online, sell them at a yard sale, or find a special vendor like a gold buyer, cell phone buyer, or consignment shop to sell some of your things.
Friends and family – If you have nowhere else to turn you can always depend on those you know. You could ask friends or family members to borrow the money. Just remember to pay them back in a timely fashion. Though it won’t ruin your credit or result in collections, it can ruin your relationship which is never worth it.
You’re all excited about purchasing a new car, and that’s great. However, before you get to the dealership, make sure that you have enough cash on hand. As you can see, there are a lot of things you’ll need to pay for before you can even drive off the lot. Having this all figured out and ready to go allows you to get through the paperwork and signing process a lot faster.