Auto Loans - Keys to Getting Great Auto Loans
Clarifying your priorities: While it can be tempting to try to buy a new car, in my opinion the priority is: reliable transportation you can comfortably afford. I suspect you’re on board with this idea, Tony. Therefore, consider a reliable used car. After all, why buy something that depreciates 20 percent when you drive it off the lot?
Keys to Getting Great Auto Loans
Biggest new car financing mistake car buyers make
The biggest new car financing mistake buyers make is trying to buy a new car without checking online auto loan rates or knowing if their credit history can support getting an auto loan. A big source of emails we get are from people with auto financing issues, whose new car loans fell through at the dealer. Buyers see 0% APR ads, but can’t get the cheap auto loan rates, as they were unaware of their low credit score. Applying for new car financing without knowing your credit score is the dumbest thing a new car buyer can do. Use our car loan payment calculator tools to play on even ground with car dealers.
Low rates are affected by many things and some of those are actually in your hands and not the lenders which give you a big advantage. One of those ways is the down payment. Many lenders will ask for a 10-15 percent down payment on the price of the vehicle that you’re looking to purchase. This actually will help determine how much your rate could be. To get a lower rate have a bigger down payment. The more you can put down the less that has to be finance on the auto loan and in turn a lower rate will be achieved. This will also give you a lower payment to pay.
Car dealers are out to make money - like any business. This means that they have to work to constantly get a new turnover of clients all the time. 0% financing is just one of many tools used to get the general attention of the public so that they will come and take a look. And if you are wondering - yes, there is a catch that may make their more regular offers a little more enticing - once you understand the actual offer.
Look at the Big Picture
The terms of your auto loan will determine how much you pay now and how much the auto loan costs overall. Remember that a low cost now may not mean low total costs for you in the big picture. For example, most borrowers choose a low down payment because it’s easy to manage today. However, that choice increases the total cost of your auto loan and usually leaves you ‘upside-down’ (meaning you owe more on the vehicle than it’s worth) for years to come.
