Ford Dealer Blog

Monday, September 05, 2011

Will You Finance Your Cash For Clunkers Car?

As folks go to trade in their old paid off car though the Cash For Clunkers program many will not have the cash to purchase a fully paid off car. Many will already be neck deep in credit card debt. Some will be out of work receiving an unemployment check. The question is, will you finance your car and take on car payments and more credit debt and if so how much risk will you take?

Helpful Tips For Financing Your Car Purchase:
Pay as much of a down payment as you can, remember the borrower is slave to the lender. Take your $4500 cash for clunkers credit and add cash to that as much as possible. Make your car payment as small as possible and pay it off quickly.

Don't buy too much car for your budget. Trading a paid off clunker for a new car with high payments will leave you car poor. The idea with Cash For Clunkers is to save money not to put your financial health at risk.

Don't lease your new vehicle. Car leasing is a rip off, if you have to get a car loan always finance at the lowest rate vs entering into a rip off car lease.

Lastly, if you have a lot of credit card debt, consider putting off that purchase of a new car and drive your clunker while paying off your credit card debt. Don't let the offer of government money keep you from goals of getting out of credit card debt.

Look for financing incentives from your dealer. Chrysler is offering 0 percent financing and many others like Toyota, Honda and Ford may also offer low cost car loans as well as the cash for clunkers program.

Ford Helps Protect Indiana Workers From Unemployment

One of the best promotions I ever saw for selling cars was done by Ford Motor Company. They pitched that if you buy a Ford car or truck and then later become unemployed Ford will take over your payments until you find work. For those in high unemployment states like Indiana this is a smart pitch. When times are uncertain and you have friends and reletives receiving Indiana unemployment benefits why on earth would you go buy a new Ford and take out a loan to do so? Well maybe you would if your payment is covered should you also become unemployed. An offer like this is smart as it shows Indiana residents that Ford knows their situation, Ford will have their back and also Ford is smart in that the odds despite high unemployment are quite small that those who can afford to take out a car note for a new Ford will actually become unemployed. There is also that small slice that even if unemployed will not actually hold Ford's feet to the fire to cover their car payment since they will receive unemployment insurance. One question i'd have related to this promotion. Would recipients of unemployment benefits have to claim the income from Ford making their note payment as income thus reducing their benefit?