GREENSBORO, N.C. — Picking out a new car can be an exciting process. But simple mistakes can cost you a lot of money.
Here are three myths Consumer Reports says you can't afford to bring to the dealership.
- "If I get approved, I can afford it"
Just because the lender approves you, doesn't mean you can afford the car. It can be tempting to get the most expensive ride the bank will finance. But as a general rule, consumer reports says your car and all its expenses shouldn't be more than 10-percent of your gross monthly income.
- "The interest is high but it's non-negotiable"
Also, keep in mind the interest rate on your loan is negotiable. Third-party loans often have marked up rates. Check with several banks, credit unions, and online lenders to find the best one.
- "The monthly payment is all that matters"
Don't just focus on that monthly payment. You need to pay attention to the length of the loan and the interest rate as well. A high-interest rate could have you paying that same monthly payment for far longer than you'd expect.