Auto Loan Tips and Tools

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Tips for the Car Buying Process

One of the most important aspects of purchasing a new or used car is obtaining your personal credit score and credit history. Knowing your credit history and score will put you in a better position to negotiate your car loan and understanding all your options.

Sometimes discrepancies can make their way onto your credit history. It is best to have all these resolved by contacting the major credit reporting agencies; Trans Union, Equifax, and Experian and working with them to have these discrepancies removed.   To obtain a copy of your credit score click here.

TAKE THE TIME TO RESEARCH YOUR BUDGET.  The rules of thumb when purchasing a vehicle is you do not want to be more than 20 percent of your monthly household income. This goes for all the cars in your household.

The 20 percent should include the monthly car loan payment, as well as all the costs to operate them, including gasoline, maintenance costs and car insurance.  Use our car loan calculator to get simple estimates.

Getting a good understanding the different types of loans there are for vehicles will help you consider what type of loan best suites you. New car loans can typically carry lower interest rates but carry longer terms. Some lenders will only finance used cars. Make sure to research auto loan interest rates to get to know what fair market is for a typical auto loan.

Also, consider down payment. The larger your down payment, the more vehicle you can afford. A down payment is a factor in risk assessment with most banks and a larger down payment shows lower risk. Typically, most lenders ask for about ten percent down for a auto loan.

There are many factors to consider when purchasing a vehicle such New or used, no down payment or large down payment.  Take the time to research your options. New car typically offer factory warranties and flexible loan terms while used cars offer lower monthly payments and unlimited potential.

When you are down to the final steps of purchasing a car and you are ready to contract, you have gotten to one of the most important stages of your loan. Be sure to test drive the car you have settled on. It is always best to know and “feel” the car your plan on purchasing.

Sometimes dealers offer “internet prices” for vehicles which can use in your negotiating process. Don’t feel trapped by the salesman; if you get uncomfortable, simply take a stroll to let tensions loosen.

If the dealer is offering related add ons, make sure that they are truly needed and don’t be afraid to say no to them

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