Have you ever coveted the latest Audi, BMW, or Mercedes model? Luxury cars seem to whisper success. They turn heads with sleek, aerodynamic styling, and once behind the wheel, few can match their smooth, powerful ride.
But most luxury vehicles come with eye-watering price tags that make financing tricky. The good news is that you can still indulge with the right approach. Strategic steps can ease the financial burden of owning an upscale automobile.
This blog post will provide five essential tips for making a luxury car more affordable. Read on for actionable advice to bring that particular vehicle within reach and have you cruising town in style.
Let’s get started!
The Benefits of Strategic Financing
Why does taking a strategic approach to financing make sense? Luxury cars often hold their long-term value exceptionally well compared to standard models.
If you opt for a shorter-term lease or loan, you can sometimes sell or trade the car in without being too far underwater on the loan.
In addition, securing pre-approved lower interest rates allows you to keep payments affordable despite the elevated sticker price.
When you weigh the pros and cons, tactical financing can make that aspirational vehicle possible.
5 Pro Tips to Finance a Luxury Car for Less
High-end cars do elicit envy with their premier styling and plush interiors. But those lofty price tags could turn your luxury car dreams into a nightmare when financing time comes.
These five pro tips will prime your credit, boost your bargaining power, lower interest rates, and slash your payments.
Now let’s read these tips;
1. Ensure Your Credit is Optimized
Since you'll likely require financing, the first step is checking your credit score. Lenders offer the best rates to borrowers with scores in the good to excellent range (680+ according to FICO).
If your score needs improvement, focusing on credit repair strategies is worthwhile. Pay all current bills on time, resolve errors on your credit report, and pay down balances. Every little bit helps increase your score to access better loan terms.
2. Weigh Financing vs Leasing
One option to consider is leasing instead of financing your luxe wheels. Lease terms on luxury vehicles are often quite reasonable, sometimes shorter than 12 to 36 months.
This allows you to drive the latest models more frequently. Leasing also means lower monthly payments compared to longer 6-year financing. Determine what works best for your budget and needs.
3. Look for Special Offers and Incentives
Luxury automakers and individual dealerships often offer periodic discounts and incentives to move inventory. These may include special annual percentage rate (APR) financing offers, rebates, or dealer discounts.
The offers typically require strong credit on approved models, but the savings can be substantial if you qualify. It's worth researching current promotions that serve your timetable for acquiring that dream machine.
4. Put Down an Ample Down Payment
While you're likely anxious to start driving, investing a 20% to 30% down payment makes the purchase more affordable.
Putting this amount down keeps loan balances lower, which reduces the amount on which interest accrues.
Ask about trade-in valuations, too, to lower your bottom line further. The more money you apply upfront, the better.
5. Consider Certified Pre-Owned (CPO)
Finally, buying certified pre-owned luxury vehicles represents excellent value. CPO cars cost 20% to 30% less than new, are rigorously inspected, and many come with extended factory-backed warranties.
With a lower sales price, you don't need to finance as much, keeping monthly payments affordable. Less money borrowed means less interest paid over the loan term, too. That's more money in your pocket.
Pre-owned luxury models offer great bang for the buck. You pick up a high-end car for a mid-range price. And still get most factory and extended coverage perks. Now, those dream wheels look even more accessible.
The Bottom Line
We hope these five essential financing tips give you a headstart on affording the luxury car you’ve always envisioned.
Like any significant purchase, optimizing credit, securing pre-approval, weighing leasing advantages, tapping promotions, making sizable down payments, and considering pre-owned can help ease the path.
With diligent planning, you can cruise in VIP style sooner than you think. Let us know if we can answer any other questions about strategically financing a high-end vehicle.
We’re always happy to help compare rates and options.
