Monthly Archives: June 2017

How to Finish the Car Buying Process With Flying Colors

Follow a Strategic Approach

Are you worried about making a good car buying decision? Do not get anxious. Follow a strategic approach for finishing the buying process successfully. Consider the following steps and you will get closer to your first car:

1. Define the Purpose of the Car

A car defines your personality as well as your profession. A working woman will preferably choose a hatchback or a sedan than a pickup truck. Also, while choosing a car, look for the purpose that it would fulfill. Decide the type of car that you want to buy and then calculate the average distance you will travel in a day. It will enable you to choose a fuel-efficient car. Once you are sure of the type of car, consider several car features. Remember that more features mean higher price.

2. Financing Process

Ideally, the process of financing should start right in the beginning. Why? It is because it will help you save time in the future. So, decide your budget and stick to it. Allocation of money for the down payment is another aspect of buying a car. Start finding ways through which you can save money for the down payment without compromising your needs. Also, consider getting a pre-approved auto loan. It is the best way of taking care of the financing process because it will give you a peace of mind.

3. Cost of Ownership

The cost of ownership of a car depends upon various factors such as car model, engine type, car manufacturer, etc. Look for a fuel-efficient car so as to minimize your monthly fuel budget. Do not forget the resale value of the car. Choose one that provides you with high resale value in the future. Remember to select a car with low maintenance cost. Ensure that its parts are available easily in the market so that you do not have to face any trouble in buying new parts for your car.

4. Visit to the Dealership Lot

Examine each and every aspect of the car at the dealership lot. Clear all your doubts by talking to a dealer executive. Talk about all the hidden costs and understand the terms and conditions clearly. Do not forget to test drive your favorite car models to choose a car that ensures comfortable driving.

When it comes to buying a car from a dealer, timing is everything. Dealers offer discounts at the end of the month to improve their sales. So, wait for the right time and do not hesitate in asking for additional discounts from the dealer. Buying your first car should not become a nightmare for you. If you want to finish the car buying process with flying colors, do not make an emotional decision. Make a practical choice and don’t get swayed by the dealer’s talks.

Auto Lending

Most people who buy a new or pre-owned vehicle from a dealership choose to finance their purchase rather than paying cash upfront. While this makes financial sense for most people, making a mistake while negotiating the terms of an auto loan can end up costing the borrower a lot of money.

1. Credit reports sometimes contain mistakes.

People with lower credit scores often must pay higher interest rates on loans, so anyone considering borrowing money should become very familiar with his or her credit report. Sometimes mistakes happen. These errors should be fixed before meeting with a lender. Some shoppers might even find that dishonest lenders may try to claim their scores are lower than they actually are. Being familiar with all three reports could give the borrower additional negotiating power and save a lot of money in the long run.

2. Shop around for the best deal on an auto loan.

Although dealerships often advertise low-APR specials, those rates are usually reserved for borrowers with the best credit. Many people will find better terms at a credit union or an online or community bank. If the borrower gets prequalified at a bank, they will be in a better position to negotiate at the car dealership without being legally bound by any agreement with the bank. Bonus tip: Any credit inquiries within the same two-week period will only count as one inquiry when affecting a report.

3. Some lenders will take advantage of subprime borrowers.

Some dishonest lenders will offer high-interest loans to drivers with poor credit, and as soon as the driver misses a payment, the dealership will confiscate the car and resell it. Defaulting on a loan will do additional damage to already bad credit, so borrowers should be sure they can afford payments before agreeing to a loan. Even subprime borrowers should shop around for the best APR. Auto lending requirements are usually lower than mortgage requirements, so shoppers should check to make sure they are getting the best deal.

 

Tips To Get The Best Deal On A Car Loan

As a car buyer, you may want to make sure that you can afford the loan. The car should be something that you can easily afford, and it should also meet your budget. This will keep you out of trouble in most cases.

1. Check your credit reports

First of all, you should get your credit report from the three agencies: TransUnion, Equifax and Experian. Actually, you should check the three of them since you have no idea which one your desired lender is going to use. Moreover, this will also give you enough time to correct your mistakes. Aside from this, you should check your credit rating because your credit rating will be used to set the rate of interest. If you have good credit rating, you will be able to get a loan at a considerably lower rate of interest and vice versa.

2. Shop around

We suggest that you shop around when looking for the best deal. In the same way, you should look for the best deal as far as applying for a loan is concerned. The majority of people don’t do it. Most of them don’t do their homework before going to a dealer. According to the Center for Responsible Lending, 80% car buyers make their financing decision at the dealership. Probably it is the convenience or the attraction of the ads offering low rates of interest. Keep in mind that you can get the lowest rate of interest only if you have very good credit scores. If you want to get started, we suggest that you get in touch with community banks and credit unions. Usually, they offer the lowest rates of interest on car loans.

3. The shortest loan

Since the prices of cars have gone up, the car loans are being granted on higher interest rates so that the total amount of the car could be paid in lowest monthly installments. So, nowadays, you can finance your car for up to 9 years. The monthly payments will come down with an increase in the number of installments. Here is the catch: if you choose a higher rate of interest and you decide to make payments for, say, 5 years, you will be paying more for the car in the long run than if you had chosen a shorter payment period. So, you should choose a shorter period for payments as this will help you get out of the loan faster.

 

Tips to Get the Credit No Money Down Auto Loan

Imagining a world without a car seems quite impossible. A car has become a necessity that is integral to our lives. Sorrowfully, many car buyers find themselves in a state of mayhem due to the compulsion of making a down payment. A down payment makes it difficult for car buyers to arrange a big amount of money in a short time-frame. To add to that, there is a possibility that a bad credit score or an average credit score can diminish the chances of obtaining an auto loan. However, there is always a way out. A bad credit no money down auto loan is the best option for you. But, before you avail the loan, make sure that you leave no stone unturned to educate yourself on all the important details.

The following tips will assist you in getting the most of your bad credit no money down auto loan:

1) Trade-In Your Old Car

Many a times, trading your old car can act as a replacement for a down payment. Once you have agreed to trade-in your old car, the amount equivalent to your car will be deducted from the total loan amount. It substantially reduces your burden of the monthly payment amount. Thus, by trading your old car, you can maximize the benefits of your bad credit no money down auto loan.

2) Get a Co-Signer

When you suffer from a damaged credit and cannot spare the amount for a down payment, getting a co-signer greatly helps your situation. If you are unable to make payments, a co-signer is equally liable to repay the loan amount. A lender will be more likely to grant you a loan if you have a co-signer with a rich credit history. Therefore, in order to make the most of your bad credit no money down auto loan, make it a point to get a co-signer.

3) Aim for Reasonably-Priced Cars

It is much easier to obtain a bad credit no money down auto loan if the loan amount is reasonable. If you aim for cars which are way out of your league, it can become difficult to get a loan. Additionally, opt for a loan with a shorter term. A realistic amount which can be repaid in a short time-frame can reduce the overall interest on your loan.

4) Present Evidence of a Stable Income

Regardless of a bad credit history, evidence of a stable income can boost your chances of getting a loan. Stability in the form of a regular job, a regular income source and a stable residential address can increase your credibility. Present pay-stubs that prove you can repay the loan within the stipulated time-frame. For a car buyer with a bad credit score, getting financing options without a down payment is possible. Keep the above tips in mind to get the most of your bad credit no money down auto loan.