Car Financing Tips to Keep You Protected
At Midtown Collision, we usually talk about repairs, insurance claims, and keeping your car looking its best. But every so often, we see situations that make us want to talk about something a little different—car financing.
Now, we’re no financial gurus (cue the “what would Dave Ramsey say?” joke), but after seeing how many people get stuck in tough situations—especially after a total loss—we thought it was worth sharing some advice to help you stay ahead.
1. Know What’s in Your Payment
Your monthly payment isn’t always as simple as “just the car.” It often includes:
Principal and interest (APR)
GAP insurance or other add-ons
Dealer fees or extended warranties
Breaking it down helps you see where your money is going—and where you might be able to save.
2. Avoid Rolling Over Old Debt
Trading in a car that you still owe more on? That negative balance usually gets added to your new loan.
In other words, you’re putting old debt onto a new car, which is also losing value every day. It’s an easy trap to fall into, but one that can keep you underwater for years.
3. Keep an Eye on Interest Rates
If your loan has an interest rate between 8% and 20%, you’re basically fighting an uphill battle. Most vehicles lose about half their value in the first six years, so it’s easy to find yourself owing more than your car is worth.
Checking with your bank or credit union for a better rate could save you a ton in the long run.
4. Plan for the “What Ifs”
Nobody expects their car to be totaled, but accidents happen. If you’re upside down on your loan when that happens, the insurance payout may not be enough to cover what you owe.
Being smart about your loan now can help you avoid that extra stress during an already stressful time.
Stay Smart, Stay Protected
Cars are important, but let’s face it—they aren’t investments. Take the time to review your financing, know your terms, and make sure you’re in a solid spot. Whether you’re buying your next car or dealing with an unexpected claim, staying informed will always put you in the driver’s seat.
Here at Midtown Collision, we’re here to fix your car—but we also want to help you make smart choices that keep your wallet and your peace of mind protected.
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