7 Tips to Get the Best Deal on a Car Loan
As more Americas are struggling to not only get but keep their car loans and with the cost of buying a new car continuing to rise, more and more buyers are being forced to finance. With these large loans, it is easy to get in over your head. Read on to learn how to get the best deal and keep your borrowing cost as low as possible.
Finance then Shop
Walking into the dealership with a pre-approved loan gives you a cash in hand advantage. Not only can you often get a lower interest rate by going through a bank, credit union, or online lender but you have greater negotiating power when you aren’t having to get financed through the dealership.
Check Your Credit History
Everyone is entitled to one free credit check per year by law. Before you even start thinking about getting a loan, check your credit. Check for errors that could increase your loan by increasing your interest rate due to a bad score.
Avoid Long Term Loans
Long-term loans are increasing in popularity because it is an easy way to drop your monthly payments. Although this may seem like a good idea in the long run, by increasing your loan term you could increase your overall cost of the vehicle by thousands.
Compare Rates and Terms
By using a loan calculator, you can compare how your rates may change depending on your credit score, loan term, and loan amount.
Focus on Total Cost
As we talked about above, a long-term loan can save you thousands in extra interest. By focusing on the total cost rather than monthly cost, you can not only save money but feel much more confident about your loan in the long run.
Bring a Trade-in or Down Payment
By bringing a large down payment or trade-in to the table you can greatly reduce your loan payment.
Learn More: Auto Loan Terms Explained
Break Down the Deal
Negotiating a loan can be pretty confusing if you find this the case ask your dealer to break down the loan into three different transactions. The price of the car, the financing terms (if you are financing through the dealership) and the trade-in value of your current car. It is also important to be aware of all the fees associated with the deal and negotiate or ask for any that you don’t feel necessary to be removed.
Getting a loan can be a scary process, keeping these tips in mind will help you make better choices and feel more confident about your choice. Do your research and shop around.