I have the cash to buy a new car, but I want to improve my credit. How long should I finance a vehicle for?

How can I finance a vehicle, pay the least amount of interest, and improve my credit?

I have the cash to buy a new car, but I want to improve my credit. How long should I finance a vehicle for?
Find out what the intrest rate is going to be first. Once that has been laid out on the table decide if it is something you are willing to accept. If not, try to work something out with the dealer. If they are unwilling to do so, tell them you will go else where. If they want the sale bad enough they will work with you. And unfortantly when you want to improve your credit you will end up paying some type of intrest rate, unless you can get them to drop it all together. (yes, dealers can do that).





You will need to finance it for atleast 1 full year. Creditors do not look at anything on your credit that is less than 12 months anymore. They are looking for people that pay longer. Anything less than 12 months does not appeal to a creditor. So if you finance the car for 5 years as suggested, and pay it off in 12 months you should improve your rating and appeal to other creditors.





But please understand, creditors make their money from the intrests rates that you pay. If you are not willing to pay those over a period of time, they may not be willing to take you on as a customer.
Reply:find out how interest is calculated on your loan and then when you send your payments in send half your payment two weeks before its due and then the other half when it is due this will help with the interest...also you could send in additional payment about one a quarter so that 4 extra payments a year are made....when you finance you should consider 4 to 5 years because it still affords you enough time for credit bureau reporting to occur on a regular basis.....its only reported every 3 months but could take 6 months to reflect on your report...hope this helps
Reply:Some dealerships offer a lower interest rate for a shorter term loan. Speak to the finance manager where you wish to purchase your car to discuss the options they have to offer.
Reply:I would do it for about 6 months or a year, that would look great on your credit and that way you're not paying a lot of interest.
Reply:for as long as you want, but pay it off as quickly as you can to avoid interest. e.g finance it for 5 years, but if you can, pay it off in 2 or 1 even. If you mkae on-time payments, your credit will look great.