Auto Financing

The first thing you must do is visit  Score Power and get your current FICO® Credit Score  this is the same credit score that auto lenders use to determine if they will give you a car loan. With  Score Power   you will get to view your credit score & credit report online instantly online.   Score Power is a service run by the credit reporting agency EQUIFAX.  There is 3 credit bureau's (TransUnion Equifax and Experian ), you must know which one the dealership uses so the best thing to do is get a  3 Credit Bureau's Combined  Report    I also suggest joining a Credit Monitoring Service that way if someone accesses your credit file or your become a victim of identity theft you can find out right away. Many Credit Monitoring Services online have 30 free trials and you can get a free copy of your credit report during the trial. You should have your credit report and score because some dealers have been know to trick car buyers into thinking they have bad credit when they really don't just to trick them into accepting a high interest rate car loan when they would easily qualify for a lower APR loan. Print out your credit report and score and bring them with you when you visit the dealership so  if the dealer say's you have bad credit you know he is lying and you can head for the nearest exit!

Now with your credit score in hand you know if you have good credit or bad credit also called less then perfect credit. If your credit is bad don't get discouraged there are many fine companies that will lend money to you to purchase the car you want. We will review those companies in our bad credit car loan section. If your credit is good then all you have to do is visit our good credit car loan section and just like you did with new car price quotes have the auto loan lenders compete for your business. In both our bad credit and good credit section you will receive many competitive bids so you can choose the lowest APR auto loan.

If you plan to lease your new vehicle then please read our section on leasing your next car and avoiding scams. If you are undecided about leasing a new car or taking out a loan then check out our lease verses loan section were both options are compared with the pros and cons for both. For the rest of you don't worry that's why you are here we will guide you through the car buying process and if you follow these steps I guarantee you will be happy with the deal you get.  Even if you are not planning on leasing we recommend buying leasing software. The same software the dealers use to distort the numbers can be purchased from  Expert Lease or Lease Wizard® they have many options for car buyer's and you can compare side by side lease versus loan. Lease Wizard® and Expert Lease will even given quotes from auto financers in your Area. Please they are affordable and the dealers use this same software against you so turn the page and use it against them.

Financing Your New Car
If you decide to finance your car, be aware that the financing obtained by the dealer, even if the dealer contacts lenders on your behalf, probably is not be the best deal you can get. Car dealer even make deals with local lenders were they receive a kick back for every auto loan they get for the lender and sometimes they make more money from these kick backs then on the car sale itself. This is why we suggest you contact  Road Loans , Auto Credit Finders, Capital One (Formally PeopleFirst.com) E-LOAN  1-800-AUTO, Auto Credit Express®, Auto Soup  and Lending Tree directly  and look for the ones with the lowest APR.  Capital One (Formally PeopleFirst.com) and E-LOAN will even send you a blank cashiers check to fill out when you find the vehicle you want.  Remember the auto loan applications are free to complete and you are not committed to the loans once you are approved you are just getting low APR quotes to use against the dealership. You probably will find out that these quotes are your best bet. Normally these online auto financing agencies offer an APR rate many points lower then any car dealership can or will. Lending Tree will even send your application out to several places and you get to pick the best loan for you. Compare the financing they offer you with the financing the dealer offers you. Because offers vary, shop around for the best deal, comparing the annual percentage rate (APR) and the length of the loan. When negotiating to finance a car, be wary of focusing only on the monthly payment. The total amount you will pay depends on the price of the car you negotiate, the APR, and the length of the loan. Car dealers love a monthly payment shopper they can get you the payment you want all they have to do is spread the length of the loan out more.

Sometimes, dealers offer very low financing rates for specific cars or models, but may not be willing to negotiate on the price of these cars. To qualify for the special rates, you may be required to make a large down payment. With these conditions, you may find that it’s sometimes more affordable to pay higher financing charges on a car that is lower in price or to buy a car that requires a smaller down payment.

Before you sign a contract to purchase or finance the car, consider the terms of the financing and evaluate whether it is affordable. Before you drive off the lot, be sure to have a copy of the contract that both you and the dealer have signed and be sure that all blanks are filled in.

Some dealers and lenders may ask you to buy credit insurance to pay off your loan if you should die or become disabled. Before you buy credit insurance, consider the cost, and whether it’s worthwhile. Check your existing policies to avoid duplicating benefits. Credit insurance is not required by federal law. If your dealer requires you to buy credit insurance for car financing, it must be included in the cost of credit. That is, it must be reflected in the APR. Your state Attorney General also may have requirements about credit insurance. Check with your state Insurance Commissioner or state consumer protection agency.

Understand that if you have credit problems, you may not be eligible for the low cost financing that is advertised. Make sure that you are not paying an exorbitant price for financing. Look out for a balloon payment, which is a large payment that becomes due at the of the finance agreement. You should always know the amount that you are paying for the car, and not just the monthly payments.

Everyone has heard or read those  ads the auto dealerships have. The ones were they claim 0% financing for one whole year or 2.9% for the life of the loan. Well the truth is yes they must offer these programs but they only offer those programs to a select few. When I say select few you would be very surprised at the number of people that the dealerships  would even consider for financing at that low APR rate. This is just one way to get you to rush right down to the dealership with out your quotes and then they have you right were they want you. You must have the financing complete before you even set foot in the dealership. Even if you have perfect credit, and  you should know your credit score now from when you obtained a  copy of your credit report.  You must have the financing complete before you go to the dealership. When I say complete I mean pre approved you don't have to sign the loan just have it in case that great dealer financing offer isn't offered to you. Another reason to get pre approved for financing is you can print out the low APR that was offered and use it as ammo against the dealer.

Down Payment and Refunds

When you have found the vehicle that you want to purchase never pay cash for the down payment. The down payment should always be charged on a credit card. Many consumers mistakenly think the law entitles them to a refund of their deposit if they change their minds after singing a contract but it does not. Once a contact is signed you are legally binder to purchase the vehicle. However you have a right to change your mind up until a contact is signed. I suggest you put down payment on credit cards just in case the dealer refuses to refund your deposit. If you paid cash you have no way to get your deposit back but credit card companies have buyer dispute clauses that almost guarantees you to get a refund on your deposit. If you paid by credit card and the dealer refuses a refund call your credit card company and explain what happened they will get your refund back in no time.

 
 
 
 
 
 
 
 
 

Website Privacy Policy

 

 Can't find the car buying tips you are looking for? Try our FREE Site Search!
Search this site powered by FreeFind

 

 
Cars Trucks Automobiles

New Cars
Used Cars
Antique Cars
Trucks
Loans
Insurance
Accessories
Car Stereo
Repair Manuals
Auto Parts
Hobbies
Electronics

 

 

 

 

 
© Copyright 2010