Getting the best financing for your next car purchase

New cars are getting more and more expensive. The average transaction price is more than $33,000. That’s $7,000 more than Nevada’s per capita income, according to the U.S. Census Bureau.

So, if you’re buying a new car, in most cases you are financing it. It’s smart that you know how to get the best financing for your next car purchase. Fortunately, the website WalletHub.com has done some research to help you get the best deals.

You’re most likely going to get the best deal starting with the manufacturer, reports WalletHub. Their financial arms offer the best deals (think “0 percent down!” and “0 ercent interest for 60 months!” for example). WalletHub says their rates can be 61 percent below average.

Toyota, Volkswagen, Kia, Ford, Dodge, Nissan and Buick offer the lowest financing rates out of the major car manufacturers surveyed. Volvo, Mazda, Nissan and Toyota have the best leasing offers, on the other hand. Leasing right now is really strong, according to SwapaLease.com. The site reports approval rates above 80 percent for three months in a row. Last September, for example, 64.5 percent of leases were improved.

Leasing is a good alternative to the high price of new cars. You can afford a lot more car for less money. Of course, you have to turn the vehicle in after three years, but it is a good way to make car payments affordable if you have strong credit but don’t want to see your cash tied up in financing a new car.

However, WalletHub says you’re going to get lower financing rates if you plan to keep your car for only three years. It says 95 percent of manufacturers will give you a better deal if you finance instead of lease. There are other things to take into consideration, such as comparing down payments and monthly payments. You may be paying a higher interest rate on the lease, but you’ll typically only pay a lease equal to 50 percent of a car’s value.

The next best source of automobile financing is going to be credit unions, which average 30 percent below typical lending rates. Your worst deals come from regional banks that offer loans 43 percent above average and national banks that come in 10 percent higher.

Something else important to consider is how good your credit is. Are you recovering from some financial difficulties? You probably don’t want to spend too much on your next car. Sure, you may need to finance it but borrow as little as possible in order to repair your credit rating.

As WalletHub says, buyers with fair credit spend six times more on a loan than those folks with excellent credit — about $6,100 more on a five-year, $20,000 loan. Fair credit could be defined as someone with a score around 650 and excellent credit is above 720. Everybody is rated on a scale from 350 to 800. Financing a car with a credit score below 600 is going to be really expensive. You should consider only paying cash.

Regardless of where you finance your next car loan, take a few minutes to crunch the numbers. Find an easy-to-use loan calculator online and see what you can expect to pay.

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