A Note For Car Buyers

Once you’ve decided on the vehicle you’d like to purchase, you are faced with the next decision- how to finance it. If you are like most of the people, aren’t able or willing to buy a car with one cash payment, you are going to need to turn somewhere else to finance it. There are quite a few options at hand - your bank, a credit union, a dealership or a specialized lending institution.

For some buyers, it might be easier or more convenient to obtain a Car Loan directly from a dealership. The dealership Financing Department will offer you a breakdown of the costs, including downpayment, your interest rate(usually based on your credit score), monthly payments and other related fees, such as title and licensing fees. You could also turn to a bank, credit union or another lender.

 In order to get the best rate on your Auto Financing, it’s imperative to shop around for the most suitable deal.  You might find great disparities between one lender to another. While banks, credit unions or online financial companies offer more competitive rates and neutral service, dealerships are more convenient but might pressure you into buying and load the  Car Loan with a plethora of extra fees.

Automobile buyers are sometimes lured into dealerships by special incentives or rebates on their desired vehicle. One thing they should realize is that the rate offered by a dealership is often marked-up for dealership profit and could be obtained for less somewhere else. Their salesmen work on a commission base and the profits made by the Financing &Insurance Department are often larger than their Sales Department’s. You should be aware of all the details and fees involved in the loan that could really add up: backend fees(additional dealer’s profit from financing), insurance, warranty, application fees, vehicle preparation fees, prepayment fees, etc. Make sure that the rebates, trade-ins and the downpayment are all applied properly.

In case that you can’t get a loan approval from any of the mainstream lending institutions due to Bad Credit, you still have the option to seek a loan from sub-prime lenders who specialize in Bad Credit or No Credit Car Loans. Naturally, they might charge a higher interest but sometime it’s your only viable choice. You can also try online tools to figure out your rates for a possible loan – try an online Car Loan Calculator.

Bottom line, you have to know your options, shop around and negotiate in order to get the best deal.  Be smart, make an educated decision and you just might save thousands of dollars on financing your vehicle.