Before considering the purchase of a used car, it is wise to establish the amount you are willing to spend or, if taking a loan, calculate your maximum monthly payment – and then make a firm commitment to stay within that amount. Don’t forget to consider the costs of tax, title, registration and insurance for your new car. As a very broad, general rule, and depending upon where you live, tax, license, assorted fees and other costs will add roughly 10 percent to the purchase price. Once you figure out how much your payment should be, research your financing options. Third-party financing can generally be obtained without having to indicate a specific make or model of vehicle ahead of time. Some institutions will give you a lower interest rate if you have direct deposit and an electronic loan payment, so be sure to ask about these options when applying for financing.
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The #1 most important thing to do before buying a used car