If you're in the market to buy a vehicle--whether it's new or used (from an outlet such as College View Auto Sales)--there's a good chance that you'll be seeking auto financing as a means of making your purchase more financially comfortable than paying in cash would be. Before you start filling out car loan applications, however, there are some things you need to know. Specifically, by avoiding some common mistakes, you can ensure that you end up with the right loan terms to suit your needs.
Trading in Your "Upside-Down" Car
If you're planning on trading your existing vehicle in, check to make sure that it's worth at least as much as you still owe on it. If you owe more than it's worth, your dealer will probably offer the option of rolling your negative equity into your new loan. By doing this, however, you'll only be paying more in the long-run. Consider getting your existing vehicle paid off before you take out a new auto loan.
Not Being Aware of Your Credit Score
You'll also need to know where you stand in terms of your credit score before you get started with the loan application process. You can check with any three of the credit reporting bureaus to receive a free copy of your credit report each year. You'll also want to locate any inaccuracies on your report and have them corrected before you apply for a car loan (or any loan, for that matter). This way, you'll have the best chances of being approved for favorable loan terms.
Accepting Your First Loan Offer
Even if you're approved for the first car loan you apply for--at the dealership or through a private lender--it's a good idea to take some time and shop around with at least a couple other lenders before making a decision. This way, you can compare interest rates and repayment terms to choose the one that will save you the most money in the long run.
Choosing a Rebate Over a Low Rate
Some dealerships will give buyers the option of choosing between a lower interest rate and a cash rebate on a vehicle purchase. Often times, the rebate is more tempting to buyers because they get to enjoy the money right away, as opposed to the gradual savings over time with a lower interest rate. Always take the time to do your calculations before you automatically choose the cash rebate; you might be surprised at what you find.Share