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Narrowing Down the Right Auto Loan for You

May 4, 2017

Your dream car passes by on the road, and you’re instantly thrilled at the idea of owning it yourself. Buying a car means that you’re successful enough for the investment and enjoy the freedom of the road. Your biggest challenge at this point is finding an appropriate auto loan. With so many options in the marketplace, it’s important to be educated about this part of car ownership. Take a look at the key points that are involved in an auto loan so that you can receive a great deal.

Negotiating on Price

According to Consumer Reports, it’s critical to look at the price of the entire vehicle compared to the monthly rate. Dealerships will often fixate on an advertised, monthly price that excites buyers. However, this low rate might be stretched across six years with a high APR or annual percentage rate. Negotiate a price on the car itself while discussing APR values at the same time. Avoid any monthly-payment discussions because they don’t truly help you on a financial level.

Purchase Versus Lease

You’ll always have the option of purchasing or leasing a vehicle. The best car loan companies can cover both types when your credit history is examined. It’s up to you to figure out if one loan is better than the other. Financing the entire car to own it outright in five years is a good investment if you plan on keeping it for a decade or longer. When you want a vehicle change every three years, however, a lease is a better option. As long as you don’t put too many miles on the car, a lease has a lower monthly payment because you simply pay a fraction of its value.

Cashback and APR Choices

As you negotiate pricing structures with the dealer, they’ll often bring up a cashback bonus or a low APR. In many cases, you can only choose one or the other. If the dealer offers zero-percent APR, it’s normally a good idea to choose this option. You’ll essentially pay the car’s face value without thousands of dollars going to interest. When you pay for a car outright, such as with an inheritance, the cashback is a better option since you’re reducing the overall price point.

Getting Preapproved

Be diligent about your loan provider by applying with several lenders, states U.S. News & World Report. Each lender has a slightly different offer that’s based on your credit history and score. Choose the one offer that’s a low APR and term length. In the long run, this preapproved loan will save you money. It simply needs to cover the entire car cost, including taxes and dealer fees.

Don’t be afraid to step away from any auto purchase. If you haven’t signed any papers for the car, you’re under no obligation to continue negotiations. You’re welcome to politely leave and find another auto dealer. Ideally, you want a dealer with a reasonable price and flexible loan options. Driving away in that new or used car will be a reality as a result.

 

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Compare Auto Loans for Greater Savings

May 4, 2017

You’ve been driving your current automobile so long that you can’t even remember when you bought it. While this vehicle provided a steady form of transportation to and from work all these years, any sense of style it once had is long gone. If only you could buy a new car, the thrill of driving and that “pride in ownership” you once had would surely return.

Budgeting for a new car

Unfortunately not everyone has money on hand to buy a new car, truck or SUV. Rent or mortgage payments, utilities and family expenses make large purchases like automobiles a rarity. However much like mortgage and credit card payments, car loans make purchasing a new or pre-owned vehicle possible. Just do your homework, know your options and comparison shop to obtain the best deal.

Shop around for lower rates

Consumers are entitled to receive one copy of their credit report yearly from each of the three major reporting agencies. Each of these are easy to view online and entirely free of charge. Increasingly, many major credit card companies like Barclay Bank and Capital One now provide their cardholders with free FICO scores throughout the year. The higher your scores, the more leverage you have when negotiating future payment plans.

Pre-arrange your financing before auto shopping 

Work through the financial aspects of buying a new vehicle before you ever physically enter a dealership or showroom. First explore available financing options from banks and credit unions where you already have a positive pre-existing relationship. Many major credit card companies also feature financing options for new auto buyers.

Be aware that it will be necessary to “pull your credit report” each time you apply for financing or fill out an application. While this is a necessity, excessive views of your credit report by financial agencies may ironically have a negative effect on your credit rating. So choose wisely and be selective.

Dealerships enjoy a challenge

Car dealerships sell automobiles for a living. To these ends, they want to do whatever it takes to place their customers into the vehicle of their choice. If you are fortunate enough to have financial options, let them know. Many dealerships will go out of their way to better the deal with a lower rate or shorter payment cycle. (Forbes.com/sites/jimhenry/2014/02/28/go-ahead-get-a-prearranged-auto-loan-dealerships-say-they-like-a-challenge/#4eb8dc465bc2)

Listen to what the Finance Department has to offer at the Dealership. If you already have an excellent deal due to a high FICO score and good credit report, they have work to do. Either way, it pays to be assertive. Don’t be afraid to ask questions and take your time. Large purchases demand thorough decisions.

Read your contract

It doesn’t matter whether you accept an auto financing plan from a bank, credit union, credit card company or car dealership. Your future payments are a means of buying a new vehicle you could not otherwise afford. Once again, take your time and read the contract thoroughly before signing. The time you spend now, is money you’ll save later on.

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