Over the years, your financial responsibilities change. And so do your car needs. Most people consider balloon payments on cars because they cannot afford the down payment or even the hefty monthly fees on the car they want. While it’s exciting to drive away with a fancy car, in the beginning, it could become a headache in the long term. If this is you, and you’re researching ways of selling a car with a balloon payment, you need to make sure that your decision makes good financial sense and it’s worthwhile.
Instead of having to refinance your balloon payment because you can’t afford to pay the remaining amount back to your lender, think carefully about holding back on your trade-in. Before you prepare to sell your current car and find a new ride to suit your lifestyle, here are a few tips to consider:
Buying a new vehicle is incredibly tempting for many people. But if you don’t have the money to comfortably commit to this kind of decision, you need to think hard about the car you currently have. Once the seed is planted about owning a new car, you soon start to nitpick at your existing car and make excuses about why you need to invest in a new car. If your current car is reliable, affordable (when it comes to repairs and maintenance costs), and it gets you from A to B with ease, you shouldn’t be considering a new car. Naturally, in life, people want new cars. But, consider what you have and weigh up your financial obligations when making your decision. If, on the other hand, your car is giving you hassles and costing you an arm and a leg to repair, a new car would be the more responsible option.
When you think about buying a new car, first consider your current monthly instalment value and the amount that you will need to pay back on your balloon payment when your contract comes to an end. Weigh up these costs and compare them with the new car you are interested in buying. Newer vehicles can be more costly to repair, so this is an additional cost that you will need to factor in over and above repayment amounts. If you complete a balloon payment, chances are that you will not commit to one straight afterwards. This means that your costs are going to be even more exaggerated on a new car. Unfortunately, it’s never fun having to think about the negative elements when you’re so excited about a new opportunity, but you need to make sure that you make the correct financial decision for your future.
So, if the timing is right for you to look for a new car, speak to financial brokers who could assist you. Take the time to shop around for various loan quotes to see how much you will qualify for on the car you’re interested in. If you have a poor credit rating because of your payment habits, you will need to push out buying a new car for a few months, to hopefully increase your score. A better score will improve your chances of being approved for a higher amount. During this process, you will need to think of when you would like to trade in your car. Ideally, you would want to achieve both goals at the same time.
Generally speaking, the last couple of months of the year are the most popular time of the year to consider buying a car. The reason for this is that dealers are looking to reach their own goals and set targets for the new year. So, if you are really looking for a deal on a car you are interested in, now would be the best time to look. Again, if you are going to be selling your vehicle, consider the best time to do so as well as the best time for trading in a car with a balloon payment. You will want to proceed with your new car without leaving yourself in an even worse financial situation where you are left with paying for two cars.
If you want to sell a car with a balloon payment, do your research beforehand, and speak to dealer professionals and financial lenders to assist you. Always consider your current financial state and how you will be able to live comfortably by making another difficult decision. It cannot be an impulse decision in your life, especially if you’re sitting with a massive payment you need to pay back to the lender on your current balloon payment. Time your purchase and secure your finances in advance.
