Tips for Driving Down the Price of Your Auto Loan
Here are some helpful tips for taking out an auto loan:
Before you sign on an auto loan, make sure to compare interest rates. The car dealership may not offer you the best rate. Check other lenders such as banks and credit unions. (Credit unions usually have better rates.) There are many sites online that compare interest rates from different lenders.
If you are able to come to the dealership with a pre-approved loan, you can focus your energy on negotiationg a better price for the car. Once you've been told you have a loan, make sure you have the loan in writing before you buy the car. Your credit score may not be high enough to be eligible for the loan you are offered. That's why it's important you know your credit score, so that you can better negotiate your interest rate on the loan.
Also, avoid loan stacking: Car dealerships may offer you a new loan that will help you pay off a loan on your previous/current cas as well as finance a new car. This is never a good idea. Agreeing to this type of loan means that you are taking out a much bigger loan than you need to.
Try to pay off as much as you can up front, so that you won't need to be paying off the car for years and years to come. In general, it's always a good idea to avoid long-term loans. Although these usually come with low monthly payments, your car's value could decrease signigicantly before you pay off the loan. You may be stuck paying off a loan for a car you no longer even want.
Also, be sure to ask if there are any penalties for paying off your loan early.
I hope these tips helped you with purchasing your new car!
on Sep 23, 2013 | Finance