Getting the Best Car Loan Tips
No matter what your credit situation there are always things you can do to help yourself get the best car loan. These tips will help you if you have a great score, or you've just gone through a bankruptcy.
First things first--get a copy of your credit report. You might not want to see it, but your lender will be, so you might as well know what they're seeing. You can get a free report online once a year, so there's really nothing stopping you. There are three major credit reporting agencies (equifax, transunion, experian) make sure to look at all three because sometimes one will have something the others will not and you don't know which one they are using. If there are any mistakes on there, fix them. These include the typical accounts marked open that aren't--but also look for things like mismarked credit limits. One important factor in your score is the amount of credit available to you versus how much you're using, so if your credit limit is higher than what is marked down, have that fixed. If there are any overdue accounts that you can fix on there, do it before applying for a car loan because it may lower the interest rate that gets offered to you.
Your down payment is important, and does affect your interest rate. This is most important when you have bad credit, but it does matter even for those with the best credit because the more you borrow, the more you will be paying in interest overall. Having a bigger down payment will save you money.
Don't get a car loan at the lot. This goes for everyone. The lenders at the lot are expecting that you want your new vehicle today and will take whatever they offer you so that you can easily drive away, now. Because so many people love how easy and fast this is, they end up paying a lot more in interest than they need to. Don't fall into this trap. Which brings me to the next tip...
Check out at least five different companies and their interest rates and terms and conditions before applying for financing. If you look at five sources you'll be able to feel a lot more comfortable that you did your best to find the best rate. Look at online sources and maybe check out your current bank or credit union--credit unions are known for offering low rates to their members.
Read the terms and conditions carefully--and ask questions about anything you don't understand--before you sign anything. A lot of the times a low interest rate is a good way of sucking people in to some awful terms and conditions that are full of “fees”. This is just a way of making their money back on their low interest rates, and can often end up making the deal much worse than a higher rate. Read over the terms, make sure you understand them and know exactly how much you'll be paying overall.
If you've gotten yourself into a bad car loan, you can refinance. Obviously this isn't the ideal--you want to get a good deal the first time around and not have to deal with it again. But, if you're stuck in a bad deal, you can get out of it. Refinancing is the act of getting financing elsewhere and using your new deal, with a lower interest rate and good terms, to pay off your old one.
With all of these tips, you should be well on your way to finding the best car loan out there.