At some point in your life, you will decide that you finally have to have your own private vehicle. If you’re planning an auto loan application anytime soon, these are some tips to help you succeed.
Review Your Credit Report
First and foremost, before applying for an auto loan, or any loan for that matter, it is important to take your credit score in consideration. Not only will it determine if you are eligible for a loan, but it will also dictate your rates and terms.
It is of utmost importance that you request for a copy of your credit report every once in a while, especially if you’re planning to apply for a major loan soon. This gives you an idea of how your application stands. Furthermore, it is always best to spot present credit score issues now than be surprised later on when your application was already submitted.
Calculate the Overall Cost of the Loan
While most applicants are busy comparing the interest rates across other lenders (which is actually a good thing), you need to take it up a notch by knowing what your deal has inside and out. Don’t just focus on the rates that you’re getting, but rather, review every cost involved with your loan, such as setup fees or broker fees, if any, late payment charges, early settlement charges, etc. Also consider the length that the loan will be in force. The lowest APR’s don’t always give you the most savings, because the repayment period greatly affects how much your loan is going to cost overall.
Don’t Be Afraid to Haggle
Your auto loan could be one of the most expensive debts you are going to acquire in your life next to your mortgage, so it just makes sense to get the best deal from it as possible, as you are looking at about a good three to five years of loan repayments. It never hurts to haggle for better rates, especially if you have a pretty competitive credit rating.
Don’t Be Afraid to Walk Away
Meanwhile, if the lender is giving you a hard time and things are not definitely going your way no matter how much you haggle, don’t be afraid to turn your back and find a better deal elsewhere. Of course, common sense should be exercised and there are times when you are presented with a really awesome deal, but chances are, you won’t immediately get that sort of deal on your first try. Even so, it always pays to check with the competition, as they may always have something up their sleeves to attract potential customers, especially if they know that you’re shopping around.
Most of the time, lenders tend to offer you a deal with add-ons included, such as insurance or safety equipments. In most cases, getting them through the deal itself benefits the lender, not you.
Be Wary of the Fine Print
There are lenders with high reputations and ones that you can definitely trust, but it would still be wise not to give your 100% trust. It always makes sense to read the fine print very carefully before you sign any contract, because these agreements are legally binding and this could be used against you after you’ve signed them.
Lastly, it is important to be very patient, no matter how excited you are to drive a new car home. Keep in mind that there’s a good chance you’ll land a better deal elsewhere, and unless your credit is awful, you have a world of choices that awaits you.