Tips to avoid overpaying on your car loan – New York News

When people go car shopping, they usually focus on the vehicle they want — not the loan that will pay for it. But good financing is the bedrock of a solid car deal, and missteps could cost you thousands.


“Once you shake hands with the car salesman, you are not done,” says Oren Weintraub, president of Authority Auto in Tarzana, California. As a car-buying concierge, Weintraub identifies cars for clients and negotiates the deals. Getting the sales contract — and all the financing terms — right is so important, Weintraub insists on reviewing a faxed copy before his clients sign.

While consumers know that low interest rates are desirable, there are other critical factors to consider.

Avoid long loan terms: The average car loan term has stretched to an all-time high of 69.3 months, an increase of 6.8 percent from five years ago, according to Edmunds.com. But long terms can put borrowers at risk of becoming upside-down on their loan — meaning they’ll owe more than the car is worth — and paying more in interest over the life of the loan.

While you can get loans up to 84 months, Edmunds recommends financing a new car for no longer than 60 months; used cars no longer than 36 months.

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