back to articles

Publish Date - August 30, 2021

Author: Arthur Brown

Categories:   Tips & Insights For Car Buying    Auto Loans & Financing   

Tips And Tricks On Financing Your First Electric Car

Electric cars are becoming more popular, but financing a car can be difficult. Here’s what you need to know about the different types of loans available for electric vehicles and how they compare with traditional auto loan options.

content article image


Electric cars are becoming more popular, but financing a car can be difficult. Here’s what you need to know about the different types of loans available for electric vehicles and how they compare with traditional auto loan options.

1. Get a Loan

If you're looking to finance your first EV, there's no better place than an online lender that offers competitive rates and flexible terms that allow buyers to pay off their vehicle over time. You may also want to consider leasing if you don't have enough cash upfront to buy outright. Leasing is often less expensive in the long run because it allows you to avoid paying interest while still having access to all the benefits associated with owning a new car.

When it comes to securing a loan for your EV, make sure you shop around. The best way to do this is by comparing quotes from multiple lenders using tools such as LendingTree or Edmunds. Also, you can visit a site such as myAutoloan.com to calculate the payments and interest rates.

This will help ensure you get the lowest rate possible and save money throughout the life of your loan. If you've been turned down before, try applying again at another bank or credit union. It could just be a glitch in their system.

Also, it will be best to consider the terms offered when shopping for a loan. For example, some banks require borrowers to put 20 percent down payment upfront, whereas others only ask for 10 percent. In addition, many lenders charge higher fees for people who take out longer-term loans. So, if you plan to keep your car for several years, look into taking out a 30-year mortgage instead of a 15 year one.

2. Trade-in

If you have got a car that you want to upgrade to an EV, you'll likely need to trade it in first. But, depending on where you live, getting rid of your old gas guzzler might not always be easy. Luckily, today, there are online dealerships that specialize in trading used cars. You can check out this car dealer to understand well how the trade-ins work. These sites typically work much like any other dealership.

In addition, some dealerships trade in used cars for EVs. They provide information on pricing, availability and even arrange test drives so prospective customers can see whether the deal makes sense. However, these websites usually won't sell your current vehicle until you sign a contract to purchase your new EV. That means you'll receive a check for the value of your trade-in plus whatever amount you paid for your new EV minus the cost of selling your old car.

3. Consider Buying Secondhand

Buying second-hand isn't necessarily a bad idea. There are plenty of reasons why someone would choose to sell their existing vehicle. Perhaps they want to move to a different city or state. Or maybe they're downsizing and moving into a smaller home. Whatever the reason, buying secondhand gives you more flexibility since you aren't tied down to a specific location. Plus, you can find great deals on preowned models.

However, buying second-hand doesn't come without its risks. One risk is depreciation. When you buy a used car, you assume the price has already dropped due to wear and tear. And, over time, the price continues to drop. As a result, you may end up spending less than what you initially thought. Another downside is financing. Since most sellers don't have cash available right now, they often turn to finance companies. Unfortunately, those same finance companies tend to offer high rates, which can add thousands of dollars to the total cost of ownership.

4. Personal Savings

If you don't enjoy taking loans or borrowing from friends and family, saving money should be your top priority. Getting your car through personal savings could mean paying off debt faster. If you decide to go with personal savings, make sure you set aside enough funds to cover at least three months' worth of payments. This way, you'll avoid having to pay interest while waiting for your next paycheck.

There's no one best method for purchasing an electric car. It all depends on how much you want to spend, where you live, and how comfortable you feel about making long-term commitments. But, regardless of which route you take, it's important to remember that you need to save money before you buy anything. Otherwise, you might not be able to afford it later.