Financing Tips For Buying a New Car
Getting the best deal on auto financing isn’t an easy task. You cannot just accept the first offer you are presented with. Therefore, to make sure you get the best financing, lowest interest rates, good dealer incentives, and a monthly payment that works well for you, here are a few tips you can follow:
Check Your Credit Report and Make Necessary Improvements
Before shopping for an auto loan, obtain your credit report from your credit card company, and dispute any erroneous information. Pay off all old debts, close accounts that you don’t need or use, and reduce your unsecured balances. Building up your credit enough to see an improvement can make a tremendous difference in the deals you are offered.
Bring Your Credit Report with You
If you are planning on using dealer financing, make sure you take your credit report to the dealership. The salesperson might still access one, but having your own can reduce the chances of being denied the best rate. However, make sure the credit report is current and complete with your FICO score.
Consider a Co-Signer for your Auto Purchase
If you have less than perfect credit, you can consider having someone with a good credit co-sign the loan for you. This will increase your chances of getting a good deal. However, be cautious when using this option, as the co-signer assumes equal responsibility for the repayment of the loan.
Shop for the Best Deal on your New Car Purchase
The total amount you have to pay for your car depends on its selling price, the length of the loan, and the annual percentage rate (APR). Shop around and compare different offers. You can search on the internet, or call various lenders. However, the best option is to get a deal from your local financial institution, as you won’t have to worry about being scammed. But, if you choose to go with dealer’s financing, make sure to ask about rebates, manufacturer’s incentives, cash back on specific car models, and reduced finance rates.
Beware of Zero Percent Financing
0% financing does sound like an amazing bargain, but such deals often come with higher prices for extended warranties, loan insurances, pre-payment penalties, and application fees. And because you forfeit the rebate option, you end up paying an even higher price than the original selling price of the car. Though many people may find 0% financing an economical way to buy a car, it does end up costing you more. So, it is a much better option to have a more manageable payment by negotiating the price down and paying a reasonable amount of interest, instead of going with 0% financing.
Read and Understand Your Loan Document
Finally, before signing any document, read all loan documents carefully. Be sure you understand and agree to the:
• Total sales price
• Number and amount of payments
• Annual Percentage Rate
• Finance charge
• Amount you are borrowing
• Exact price you are paying for the vehicle
So, now that you are familiar with these tips, getting the best financing deal on your new car won’t be a problem.
Try AutoFinder.com for your Auto Financing, we have helped consumers with all types of credit obtain a loan for their new car purchase.