If you have decided to purchase your first car, there are a few things you need to ask the dealer. This includes asking for an Auto Loan term sheet, and whether they will approve or deny the loan. Although most lenders are willing to give out auto loans, it is vital that any lender has a good credit score and personal assets. The amount of money you can borrow is determined by the lending company and how much risk you are comfortable with taking on. Some lenders will only lend you up to $25,000, but most lenders are more flexible. Therefore for those who want to take advantage of all their options, it is best to approach a financial institution like Ally Financial who can help you find the right deal. For many people, however, this will be challenging because of the complex nature of finances. There are lots of factors involved when shopping for cars. A lot of them depend on your needs and what sort of vehicle you are planning on purchasing. Here are five tips to look out for when shopping for a new car:
1. Do not shop around – Get quotes from three or four different dealerships. That way, you get one guaranteed-preferred rate. However, don’t just go to a major dealership unless you know in advance you will need financing. Because lenders usually won’t offer auto loans to those with no credit history or poor credit scores. Be sure to check and compare any offers before committing to one. Having multiple quotes helps narrow down which lender you’ll choose. You can also talk directly with each individual dealership regarding their terms and conditions and fees.
2. Check online for discounts – It may seem obvious, but it’s never too late to sign up for automatic monthly payments. Compare rates across lenders and see if certain deals apply to you. Most companies will allow the customer to create contracts with specific monthly installments, so make sure to carefully read the fine print. While some lenders might require consumers to pay the minimum amounts upfront. Other lenders won’t charge any interest until at least a year later. Don’t forget about any other discounts such as early prepayment penalties or points accrued while waiting a month to finance your purchase.
3. Check the warranty and service history on the trade-in card/vehicle – Many lenders will offer low payments or a trade-in period, as well as the option of making full cash purchases over time. In order to qualify, you’ll need to maintain satisfactory credit. Look for a lender that will also provide free maintenance and tire services for all new vehicles. Also look for terms that include insurance coverage. For example, if you aren’t happy with your current car situation, ask the seller to cover repairs or replace your vehicle. Remember that even though owning a new car will cost less financially than refinancing the same vehicle, it’s very important to consider the overall value of your car. All car buyers should keep in mind the worth of their used vehicle. Even if its covered under the original purchase agreement, it should still be considered a great investment.
4. Make sure the vehicle is insured – Some creditors may require a physical inspection of the vehicle before granting full payment. See your local office to discuss the insuring requirements and if there is something that could cause problems. Also be sure to take into account the deductible that applies to the entire purchase when calculating your estimated bill. Insurance policies vary between lenders, but generally, the higher your premium, the lower your total loan amount will be. Once again, be sure to read your contract; there may be hidden charges and fees that come with being approved. Paying extra for protection against unforeseen dangers is always better than getting stuck with high repair costs.
5. Have a solid credit record – When considering auto loans, a lender must see if they can lend you enough money to cover everything. Before applying for auto loans, determine the total amount of money needed. Then, review your past credit to ensure you don’t have any major issues in the past. Checking your credit report can not only give you valuable insights about yourself, but also help you understand if the terms of the loan are appealing relative to others in your family. Credit reports also can show potential problems you are unaware of. Learn all the ways by checking your credit report, using both FICO® Score & Experian™ Score.
A word of caution: Financiers do not accept deposits online or through mobile devices. Instead, these financial institutions demand proof of address when applying for Auto Loans. Always double-check when giving out your contact information and don’t wait until after the fact, so you aren’t left without cash. On top of verifying your residence and ensuring the eligibility for the loan, ensure you present a valid credit report that’s been reviewed by a competent independent firm. Being able to prove you have done that upfront goes a long way. If you can’t, then your application will likely fall flat.