There are some great deals on cars today, but before you set your mind on your next set of wheels, be sure you know how to get a car loan to finance your purchase. Some dealers, eager to close the deal, will even show you how to get a car loan by doing most of the work for you. Here are some points to consider.
- Know your budget limit – Be reasonable in what you expect to finance for a car. Don’t look at top-of-the-line models or expensive options if your budget is more in the affordable car range. And, since a car purchase is the second-largest expenditure (after a home) that most people make, be sure you’re not sinking all your money into the car and depriving yourself of life’s necessities.
- Check out manufacturer’s rebates and incentives – A good way to cut financing costs is to factor in available manufacturer’s rebates and incentives. You can often carve thousands of dollars off your amount to finance just by shopping around. Compare what’s available from different automakers, and shop further by model within the car company’s offerings. The idea is to reduce the amount of your down payment. This also reduces your loan-to-value ratio – and makes you a more attractive loan prospect to the car lender.
- Monitor your credit score – Anytime you buy a big-ticket item and finance most or all of it, the lender checks your credit score and history. If it’s not in the 700 to 800 range, you won’t get the best loan rates. You may need to repair your credit history for a few months before going for a loan.
- Check out automaker’s in-house finance company – One of your first choices for how to get a car loan is the in-house finance company of the automaker with the model you want to buy. Go to the car company’s website and search for links to the finance arm.
- Inquire about dealer financing – Dealers often have financing options that may be more competitive than the automaker’s in-house finance company.
- Shop credit unions and other loan outlets – Also check out financing through credit unions, the bank where you currently have accounts, and consumer finance companies.
How to get a car loan today means that you’ll need to take all the appropriate steps. Research, plan, evaluate everything, and then implement the best deal that you can.
To get other helpful car loan tips and get an interest rate quote on an auto loan, click here.