An auto loan usually has a far lower interest rate than a credit card. You may see an "incentive rate" of 2 or 3 percent on a credit card, but chances are that will expire before you get the car paid off. Also, if you put it on the card at an incentive rate, and then use the card to charge anything else, the credit card company will apply all your payments to the low-rate balance. So, in essence, they'll "move" your entire balance up to the normal (high) credit card rate.

Also, the car dealer may want to charge you extra if you charge the car to a credit card. Those who accept credit cards pay a roughly 2 percent fee to the credit card company on each transaction. They may want to charge you for this.

I would definitely suggest a car loan. Keep in mind that if you wish to pay off the car early, you can still do that. Just make sure you get a "simple interest" loan (most car loans are simple interest) with no pre-payment penalty. With most car loans, it's fine to pay the car off early or mail an extra sum of money along with the payment to be applied to principal. This will reduce the total interest you pay and get the car paid off early.

Thanks for your simple and understanding reply.I will take your advice.This time next week I will be driving my new car.The first one in 17years.The old one finally gave it up.I had planned to outlive my car but it just did not work that way.I feel like a teenager starting over.Goldy

Congratulations, what kind of car?

I second what cowboy said...pay a little extra each month, even $10.00. It will make a huge savings over the long run!

Also, shop carefully for insurance. Each time your insurance is up for renewal, shop & compare premiums again...there can be huge differences in insurance costs. If you are paying $200/month with X company, and after 12 months you find Y company will give you the same coverage for $150, talk to X company. Often they will reduce your rate just to keep your business.

A hyundai.Just enough car to get me from point A to point B.But NEW!!!!!!!! Thanks for the tip about Insurance.It's been a long time since I brought a new car.I thought I would out live my old car but they just don't make Volkswagen like they used to.My VW only has 6700 on it but it stays in the shop more than it stays on the road.Parts are hard to come by and it's just a hassle.So hit the road Jack.

Hi again Goldy,

You may want to check a couple or three potential lenders, also. Probably get a potential loan lined up before setting up the deal regarding financing with the auto dealer, so you don't have to make the loan from him, also.

Many people who finance with a dealer don't realize that they're actually making two deals:
-buying a car and
-arranging a loan.

Always nice to have several strings on your violin, not just one.

The more possibilities you have, the more control you have.

It's your money - or, rather, you're the consumer, so you can make a deal anywhere you want. If you have several potential sources of money, you can choose the best deal.

If you have assets like a bond, stocks, etc. that you can use as collateral you'll likely get a better interest rate at lenders like a bank, credit union, etc. as well.

Good wishes with your new car.

I last bought (and the only time I bought) a new car in 1976. Don't propose to buy another new one, as the loss to depreciation is too heavy in the first couple of years.

Happy trails to you, Goldy.

ole joyful

Thanks for your help.Will wait till my grandaughter gets here and we will do my homework.The car can wait a few more days as we see the best way to go.Like you said 'It's my money and I have to pay it back."

Hyundai is offering some good low-rate financing deals right now. On the Elantra and Sonata they have zero percent financing for 60 months. On the Accent you can get zero percent for 36 months, 0.5 percent for 48, and 1.5 percent for 60. There are low-rate financing offers on all of their vehicles.

However, you can also take a cash rebate instead of the low-rate financing. The maximum they're offering on any vehicle is $2,000. In most cases, 60 month financing at zero percent interest is going to be worth more than $2,000, so in this case I'd probably take the low rate rather than the rebate. But if you have some other source of low-rate financing, or if you plan to pay the car off relatively quickly, the rebate could be more to your advantage.

One more thing to think about: If you are going to take a zero percent financing offer, there is not much sense in making a big down payment on the car. It would be more to you advantage to keep your $8,000 invested, earning some return for you, rather than put that into the car, since Hyundai is lending you the money interest-free.

Just got my car.Everything just like the ad says.In two hours I was on my way down the highway with a new car.With payments I can live with.They were so nice that I can't believe my good luck.It would be nice however if you take someone younger than 40 with you who has brought a car in the last few years.I was lucky I had my grandaughter who went to school for this kind of thing.The first dealer and us almost came to blows but lucky we had another dealer down the road who we could go to.We are now ROLLING ROLLING.