Every person dreams of purchasing a new car, but budget and lack of good deals often become a hindrance in these aspirations. Negotiating a good deal on a new purchase is just a cake walk, as compared to getting a good car loan. How get best deal on car loan? In this article, we'll talk about tips that will help you grab the best deal on a car loan.
1. Shop for Loan before Negotiating Deal for the Car: It is always advised to fill up the application process of loan before negotiating your deal on the new purchase. You should apply to only reputed lenders and banks to ensure you get the best possible deal at competitive rates. It has been observed that online banks and lenders usually have more competitive deals as compared to traditional ones. It is better to get pre-qualification for a loan, which will in turn help you make the relevant negotiation with the auto dealer.
2. Make All Loan Inquiries At One Time: Whether your loan application is accepted or rejected, every time you apply for a loan, you credit score goes down. As a result, you lose the chance to get prime-rate loan. It is advised to limit your loan application procedure within a two-week period. In this way, all inquires will be counted as one and keep your credit score balanced.
3. Get To Know About Your Credit History: In order to learn your exact credit score, you may use FICO or credit score for a small amount of fee. You can order your score online by three different agencies to have the right hint of your credit score. Although, their report may not be exact, but it will definitely be close to what your banks will have. It is a great way to have a good idea about your credit score before applying for a loan. Moreover, the credit score eligibility is relatively low, giving you a wider scope.
4. Focus On Total Loan Amount, Instead Of Monthly Payments: Focusing on monthly payments will only have you buy the expensive loan. You might even end up borrowing money that you may not need, and that will increase your greed to get a better car, perhaps out of your budget. Most companies will try to tempt you to borrow more money, by reducing the amount of monthly payments and increasing the duration of the loan repayment. This is a way to charge more interest from customers. So make sure you don't get into their trap.
5. Don’t Assume The Best: Lenders would never let you know the best offers available in the initial trials. In order to crack the best deal, you should always pretend that you've been shopping for car loans for a while now and you have some really good offers in hand. This way you'll be able to see a variety of better offers, than the traditional ones.
6. Know Your Tools: It is important to gain knowledge about the available market tools that can help you make the right choice. You can choose between dealers financing or cash rebates. In order to choose the best, you may use Bank rate's calculator. It will help you pick the better deal.
7. Read The Documents Carefully: Never sign the documents or any kind of paperwork upfront. It is always better to take them home and read them thoroughly before reaching to any conclusion. If you think any clause or condition is not appropriate or not clear, better walk out of the deal. Auto loans are basically binding agreements, and it is not good to get stuck on something you are not sure about.
8. Compare The Calculations: You should always have a set of private calculations, when it comes to monthly payments. If you think the calculation is not a match with the bank's payment terms, there's something in the loop that you're not aware of. Always recheck the calculation by using Bank rate's calculator to be double sure.
9. Avoid Conditional Financing: Do not make the attempt to pick up the car from a dealer without having an approved financing. Make sure you completely finalize the loan terms including, down payment amount, interest rate, length of loan, monthly payments, before heading on to the dealer. In case the financing “conditional,” it can be changed by the bank anytime, and you could be stuck with less advantageous terms.
10. Do Background Check On Your Lender: Not just the bank, it is always a smart move to investigate the person or organization you're dealing with. You can refer to the Better Business Bureau, and other kind of government agencies that regulate lenders. You can even do a thorough online check to see what others have to say about your pick. Disregard the lenders with maximum negative comments or complaints.
This post has been written by Zohan Smith. He loves to write about Finance. He recommends this company for some good deals on car loans.