Before You Take Out A Car Loan...Here's A Useful NEW Worksheet To Compare Offers
From the Consumer Financial Protection Bureau comes a worksheet to help car buyers compare loan details. Here’s the first page of the worksheet:
What is there to like about this tool?
- It encourages car shoppers to comparison shop for their auto loan just as they would for their car. We know based on research that about half of home buyers don’t comparison shop for mortgages so one would presume that the number that comparison shop for auto loans is even lower (especially when the dealers are expert in selling their own dealer financing)
- It helps buyers know what terms they can negotiate (see the yellow circles with up/down arrows)
- It gets buyers to focus on total payments rather than just monthly payment. By approaching the decision from this angle, you minimize the interest payments.
- CFPB provides additional explainers to help with the car buying process.
- Rather than just plugging numbers into a calculator, this tool provides a more detailed and nuanced approach to understand the variables that go into making this decision about auto loans.
Look for an upcoming activity with this tool or feel free to create your own (and show us what you have done!).
Check out the NGPF Role play on Buying a Used Car
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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