What it Takes to Get Auto Financing
When one needs to get a loan to buy a car, it seems like a daunting task. There are so many places that say they can help with your auto financing, but many people do not even know what they should be looking for.
Buying a car can be very frustrating for many people every day. This process becomes especially frustrating for those who may need auto financing or loans to get their car.
Picking out the right car is enough hassle on its own without having to worry about getting financing approval. Many people need to buy a car but do not completely have the money to buy one, thus causing financing to be a process many people must deal with when looking for a car.
Auto financing is getting a loan to buy a car when one may not have funds readily available. It can be confusing with so many deals; how can one know which loan is right for what they need? Many things are examined when applying for car financing and many places offer car financing for those interested.
Where You Can Look
Places you can go to get financing for your car can include a bank, credit union, or other financial institutions. Getting financing this way can get a person approved for a loan even before he or she goes to the dealer to buy the car (which is probably the best way to go).
One can also get financing from the dealer or manufacturer. This way often costs the buyer more, but nothing is true 100 percent of the time. Another option to get financing for your car is to get a home equity loan — but only if you can afford to do so.
One can also have another person cosign for a loan. No matter which option one considers, all should be explored to make sure the best deal is had. Nothing is certain all the time, and different circumstances are right for different people.
In addition, leasing should not be counted; it should be kept in the back of one’s mind just in case that becomes the best alternative.
Many online sources also offer auto financing, regardless of current credit status. Many of these specialize in getting auto refinancing for people with bad credit or no credit at all.
Common information these sites may ask a person interested in financing includes address, employment information, and income, among other things.
This company claims to be able to help get car financing for those with any type of credit — even bad or no credit. They claim to be able to get approval for those with bad credit and have first-time buyer programs for those with no credit at all.
Know Your Credit Score
When getting auto financing, one should always go to the dealer, or wherever they are getting their loan, with knowledge of their credit score in hand. Many organizations will give a person their credit score and claim it will ruin their credit score.
Contrary to what some think, getting your credit score will not hurt your credit. A lot of factors go into deciding one’s credit score, and one who may think they have high credit may be surprised at the findings.
A score above 680 is usually considered to be good, and below 550, not so good. Going armed with your credit report can save you from being taken advantage of by dealers and others who may try to get you to pay more than you should for your financing.
Getting an Auto Loan Step by Step
Like many Americans, you need an auto loan. You might be worried about the hassle involved, intimidated by pushy, tricky dealers.
We’ll share some information with you that will enable you to feel confident in your ability to get a good bargain and drive home from the dealership with the car of your dreams at the price of your dreams.
Seven out of ten new cars and trucks are financed with an auto loan. Most of us can’t afford to pay cash for a car, and car loans allow us to get the automobile that we need by making affordable monthly payments.
But before you begin your car or loan shopping, you need to create a budget. Determine how much you can afford to spend on a monthly loan payment for your car.
Before you can begin the search for car loans, you’ll need a copy of your credit report, since this is the only way lenders will be able to give you accurate estimates of what the loan will cost you. Clear up any inaccuracies or problems on the report. Now you are ready to shop.
You can obtain financing for a car in several ways. Banks, credit unions, and car dealerships all offer loans for vehicles. Usually, banks and credit unions will offer lower loan rates, especially if you already have business with them, but the only way to be sure is to comparison shop.
Get Auto Financing
Another option is to finance your car via your home equity loan. You’re sure to get a low rate, and the payments are tax-deductible. Once you have done some research and found an auto loan rate you think won’t be beaten, have that rate locked in for you.
Now it’s time to start thinking about the car itself. Decide what options are most important to you. Comparison shop for the car as well as for the loan.
Compare similar models online and at showrooms. Don’t be afraid to negotiate the price. Most dealers have a profit margin of 10 to 20 percent (the difference between the invoice price and the suggested retail).
The dealer usually begins the haggling at the high end of this range, but since any profit is better than none, they are willing to go considerably lower.
Make certain that the car you are getting is worth the price of the loan you had to take out. You might want to obtain a CARFAX report, which will tell you the vehicle’s history based on its VIN (vehicle identification number).
Never sign an “as is” statement, which essentially means that if the car breaks down as you pull out of the lot, you’re stuck with it. No refund for your auto loan, no compensation.
There is no reason a dealer would want to sell a car “as is” unless the car is in bad shape and they know it. If the car you are buying is used, examine the Buyer’s Guide, which the Federal Trade Commission requires to be posted in the used car.
If you have an old car you want to get rid of when you purchase the new one, think twice before trading it in. And if you got a good bargain on the new car and the loan, the dealer will be looking to make up for that by ripping you off on the trade-in.
You may want to check the library for references that can give you an idea of how much your car is worth. Take your car to several dealerships and ask them what they can offer you for it.
It may help you to get a lower price if you let the dealerships know you are comparing offers. Lastly, consider selling the car yourself. It may take more time and effort, but you will almost always get more money this way.
Car financing via an auto loan doesn’t have to be difficult and it doesn’t have to be too expensive. If you follow this guide, and comparison shop thoroughly for both car and car loans, you’re likely to get such a good deal that all your friends who want to purchase a car will come to you for advice.