Q. Should I finance my car through the dealer?

A. You may find it advantageous to finance your car. Many car buyers prefer taking out loans to paying cash for any of the following reasons:

You may need your cash for other purposes, such as paying for other products or services, maintaining a better cash flow, or building a cash cushion; for such things as emergencies or college tuition.

You may be able to buy a more expensive car by using financing. Under some circumstances, if you finance a car that develops serious problems, you may not have to continue making payments.Some people would rather have to make monthly payments than use their own money because they would be lax in paying themselves back.

If you decide to finance, you will pay less to begin with, but the total price will increase due to interest and other costs. When financing a car through the dealer, make sure to get these things in writing:

The price of the vehicle

The finance charge

The APR – how much interest will you pay per year? This should be expressed as a percentage.

The number of payments

How much each payment will be

The total price of the deal, including interest and finance charges.

Jan. 19, 2009.