The following is a guest post. Enjoy!
4 Golden Rules for Getting a Car Loan
With car sales increasing all over the world, the faltering economy has done little to deter shoppers looking to get a great deal on a new car. Although it’s rare that a buyer will have enough money to buy a new car outright, car loan approvals are on the up, meaning shopping around for the best credit deals has become that little more complicated. Shopping for the loan itself might not be that fun, but if you find yourself the right credit package, the fun will certainly be in the driving of your new sports car or SUV.
Be realistic about your credit situation
If you’ve decided that you want a new car but can’t afford to pay the full amount, understanding what credit is available to you will impact on what vehicle you buy. Make sure you get an up-to-date credit report that shows your most recent credit rating. If there’s outstanding loans that you’ve paid off, let the credit checker know before you process your car finance offer for approval. Even if you’ve got bad credit, making sure your paperwork is in the right order will have benefits to your application. Even if you’ve got a great credit rating, don’t assume that you’ll be offered the best rates that many dealers have to offer. 0% finance offers are dangled in front of consumers even though many of them won’t quality for the discount financing.
Go and shop around
Make sure your financing is already sorted before you go anywhere near a place to car shop. Whether its car loans in Australia or Eric’s English Motors, it’s widely known that car dealers also double up as terrible lenders, so don’t ever get your financing from the high street. Take to the Internet to find great deals for car financing, some only exclusive to the web. Check your bank too. If you’ve been a good customer, they might offer you good deal. Make sure you read the small print too. You don’t want to borrow from a lender that will be able to cancel your credit at any time.
Dealers hide their profit from the buyer by increasing their interest rates. Make sure you get other offers before applying for credit, as you can use these quotes to see if you’re getting a good deal.
Don’t be forced into adding extras to your credit
Car dealers are finding more and more ways to make profits, so don’t get sucked in to buying extras when you don’t need them. Adding extra insurance to your credit for undercoating, rustproofing, and other insignificant factors can make your payments rise to as much as double.
Beware the conman
Finally, don’t get sucked in. If there’s something on your contract that you don’t understand, have it checked over by an independent advisor. Some dealers will offer ‘conditional financing’ in exchange to let the customer take the car home there and then. Beware of this, as the dealer could demand payments be made to the car very quickly after you’ve bought it. If you’ve followed these processes correctly, then you’ve already waited quite a while to get your new car. I’m sure you can wait a few extra days for it to be delivered.
How about you all? What rules do you follow to make sure you get a good-quality car loan?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/uggboy/4098274795/sizes/l/in/photostream/
