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Shop Around for a New Car Loan
Before you head out to buy a new car, it might be helpful to research financing. When you know your options and how much you can afford, it will make the car buying process significantly less stressful and less confusing. When you know how much you can afford, you know where to start and what cars are immediately out of your budget.
Your first step in researching your financing is to consider getting pre- approved for a new car loan. Pre-approval means you can shop with the confidence your loan is going to be approved, and you know exactly how much interest you're going to be paying ahead of time. Rather than sitting at the car dealer waiting to see if they'll approve you for a loan, you can go in with confidence.
Shop around. Every bank and lending organization will have different rates and lending terms. When you're buying something as expensive as a car, the difference of one or two percentage points can save you hundreds, even thousands of dollars. One quick look at bank rates online can show you a difference in rates from 6.71 percent to 7.47 percent.
Your local bank or credit union may offer much better rates than a national
chain and certainly better rates than your local dealership.
Before you apply, spend a bit of time calculating what you think you can
afford. This way you'll save time and stress dealing with potential rejection.
There are a number of auto loan calculators available online and they
can give you a good indication of your monthly payment.
Things you need to consider:
Your down payment
Your trade in
Your interest rate
Your tax, title and destination
Your registration, insurance, and tags.
Lastly, take a look at your dealership and see what rates, promotions, and financing options they have. Sometimes their financing options can offer significant financial gains. Most dealerships offer a website where you can research their financing options but don't hesitate to give them a call or stop by. They want to make a sale, which means they want to work with you to help you pay for your car. The options to finance your new car are many, however a little time and research before you set your sites on the perfect car can save you time, stress, and a whole lot of money.
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