Do not consider taking a vehicle from a dealer before all aspects of financing are finalized including down payment amount, the length of the loan, interest rate, monthly payments etc.
Many of you would be taking days to ensure that you get the best deal on a car. You would deliberate over certain things till you are able to get the lowest possible price on your chosen vehicle. It is, therefore, quite ironical to see that you simply do not care much about shopping for the best possible auto loans that give you the best interest rates. If you go to the dealer without finalizing the financing, you would be compelled to accept even the unfair terms offered by the dealer. The dealer could be charging much steeper interest rate than elsewhere. Moreover, dealers are in the habit of marking up a loan’s interest rate and that could cost you extra hundreds of dollars.
Obviously, in the end, you would like to balance an auto loan’s total cost as opposed a monthly payment that you could afford. However, if you are focusing solely on your monthly payment, it is quite likely that you would end up with possibly a bad deal. Here are a few expert tips for choosing an auto loan with the best possible interest rate.
Buy the loan separately
It is a good idea to initiate the auto loan application process with banks, reputed online lenders, credit unions, and also, auto insurance company, much before you start negotiating on the price of a car with any dealership. Experts believe that online banks offer the best deals. These little banks seem to be very competitive. Many of them escaped being hit by the credit crunch. Moreover, credit unions offer rates that tend to be around 1% to about 1.5% lower as compared to the banks.
Know your credit history
You should be aware of your credit history. Try getting free copies of your credit reports, one each from Experian, Equifax, and the TransUnion. If you are looking for an accurate credit score, you could consider ordering them in lieu of a negligible amount. The Fico score or the credit score purchased by you may not necessarily be the same score used by the lender. However, it would be quite close. Browse debt settlement reviews for a clearer perspective.
Concentrate on shopping for total loan amount
You must focus on total loan amount and you may consider monthly payments just once while calculating how much you would be spending on your car. While comparing loans, focus on the APR or the Annual Percentage Rate. A lower rate would be generating remarkable long-term savings.
Another crucial point of consideration would be the precise loan term that would be impacting your monthly payment along with your total cost of financing. Keep in mind that a shorter term would imply relatively higher monthly payments and a definitely smaller amount paid overall.
Follow all the above-mentioned tips. Moreover, you must dodge conditional financing. Do not consider taking a vehicle from a dealer before all aspects of financing are finalized including down payment amount, the length of the loan, interest rate, monthly payments etc. Do not agree to any conditional or contingent financing as they might be changing in future and you would have no other option but to accept the not so profitable terms.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.