If you’re in the market for a new vehicle, as soon as you walk into a dealership it won’t be long until a salesperson asks how you intend on paying for the new car. While financing a car may seem like a straight forward process in which you get a car loan to purchase a vehicle, the process is a bit more detailed than that. Therefore, it’s important to educate yourself about auto financing before you begin the car shopping process. Experienced financial advisor and Florida native Jeremy Marcus offers the following financing tips to get the best deal on a car loan.
Check Your Credit Score
Before you visit a dealership, check and understand your credit report and score. The better your credit score, the more likely you are to get approved for a loan, and you are more likely to get one with a great loan rate. Although a dealership can check your credit score to see if you can get approved for a loan, you can also use free tools like CreditKarma.com to help you understand where your credit score falls.
Shop Around for the Best Loan
Don’t just settle for the first loan you are offered. Always shop around and compare loan offers to find one with the best rate. The better the loan rate, the more money you will save.
Find the Shortest Loan You Can Afford
Although shorter term loans come with lower interest rates, you do have to pay higher monthly payments. However, not only will you pay off your loan faster in which you will own the vehicle, you won’t pay as much in interest as you would if you stretched out the loan longer.
Put 20% Down
When you make a down payment of 20% or more you will end up with a lower car loan that you’ll be able to pay off at a much quicker rate. Once you pay off your loan the car is officially yours. Some dealerships don’t require a down payment to finance a vehicle but it is highly recommended that you do so.
Pay in Cash for Taxes and Fees
When you purchase a car you will have to pay miscellaneous expenses like taxes, registration fees, documentation fees and other extras. Usually dealers will be happy to roll some or all of these fees into your financing. But it’s recommended to pay in cash for these so you don’t have to pay more in your monthly payments. This way you get these payments out of the way and don’t have to worry about them.
Author: Paul Grasmanis
A dedicated professional who writes with your interests in mind. My goal is to write pieces that help you form your own opinions, not force my ideals on to you.This author has published 126 articles so far.