Steps to Gaining the Thriftiest Car Loan
Levi Quinn (SubmitYOURArticle.com)
May 13, 2011
If you're feeling pretty great about yourself because you just got the price you've been negotiating for on your new car, congratulations, but don't celebrate too much. Next, you should be preparing yourself to do some even heavier negotiating to get a great car loan. Here are some tips to help you find the cheapest, highly inclusive car loan:
• Get to know yourself. You should start getting familiar with your own credit history, so it won't come as a big shock if the dealer tells you that you don't qualify for a specific loan due to your poor credit past. You can get free copies of your credit report on several different websites, but note that you won't be able to find out your exact score without paying a fee. Also, if you didn't receive that mortgage rate because of your credit score, don't worry just yet, auto loans usually provide more wiggle room.
• Shop separately. Before you start negotiating on a car's price with a dealer, begin the application process with your credit union, bank, insurance company or highly regarded lender. This way you can get prequalified for a loan, and negotiate with confidence. Once you have a written contract then ask the dealer if they can beat your current financing plan.
• It's the total that counts. You want to shop the total loan amount, not the monthly payment. Think of this way, the only time you should even take the monthly payment in account is when you calculate how much you want to spend on your car. Don't be fooled by lenders, as some want you to focus on lower payments so that you borrow more money and thus, pay more in interest rates.
• Read that fine print! Don't be mistaken, there's always fine print. Take home loan paperwork and read it before you commit to anything. If a lender or dealer tries to convince you otherwise, consider walking out, as this is a binding agreement for years to come.
• Do the math. Double-check all calculations, if the monthly payment is even slightly different than what you came up with, the loan might not have the terms you negotiated.
• Is everything complete? Never take a car from a dealer until the financing, i.e., down payment, interest rate, monthly payments, length of loan, is completed. Watch out for words like "conditional" or "contingent" as this means your financing options could change at any time, and not for the better.
• Background research. Be sure to investigate your lender or anyone else that you're specifically dealing with. You can search online to find out what customers are saying, but keep in mind that not all online comments are true. However, these comments can give you a heads-up of any potential issues that may occur in the future.
Buying a new car shouldn't be a rushed process. Take your time, investigate and research car deals, lenders, etc. You never want to be pushed into purchasing a car or loan that makes you feel uncomfortable, because chances are someone is trying to hide something.
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