Auto car loans are easy to get if a person has the right credit reputation and the documentation to prove it. A car loan tends to be easier to obtain compared to other loans because the car itself serves as collateral or security on the loan.
A person who wants a good deal on their auto car loans should consider the following steps.
Source: Thinkstock/studio-pure
1. Deal Directly with Car Dealers
Dealing with agents can make the whole process easier on the part of the car loan applicant. However, it can mean an additional burden regarding the commission which the agent will get from the sale. A car dealer may be able to offer the buyer the lowest cost possible as there is no agent’s commission. They may also be able to provide more benefits and perks for the borrower since they are directly dealing with him.
2. Choose a Bank where you Already have Established Credit
Getting credit from a bank that knows your credit history and that has already dealt with you in the past for other financial transactions can make the car loans much easier and more efficient. Banks usually give preference and privileges to a client who has a good credit standing. A good score can mean a lower interest rate so check out what they can offer you, and always check for a better deal.
3. Approach other Banks or Lending Institutions
Lenders will always outdo each other in giving special loan discounts and other perks to loan applicants with good credit ratings. A person with a good credit score should approach as many lenders as possible to make sure they are getting the best deal for their car loan. Some lenders may offer lower interest rates or locked interest rates, and this would be beneficial to the borrower. Some benefits can come in the form of perks like free insurance, car accessories, and the likes.
Source: Thinkstock/maxuser
4. Check Local or Special Organizations
A person who belongs to a cooperative or an individual organization should inquire about the possibility of getting their car loan through this organization. A group loan can be less expensive and more advantageous for the borrowers because if it is a bulk sale or loan, then there is a significant possibility that the dealer will give out a discount or will implement the car loan on individual terms.
5. Check the Specifics on your Interest Rates
Most car loan deals go sour to the detriment of the borrower because there are agreements they may not have been aware of when signing. A borrower should make sure that the car agent or dealer or the bank puts the agreement in writing. Once the contract is about to be signed, do not sign it hastily but ask to be given ample time so that the contract can be adequately inspected or studied.
6. Compare Different Auto Car Loans Available
You will want to compare auto car loans in terms of rates, terms, and all of the fine print. The best way to begin to compare car loans is to familiarize yourself with the different types of auto car loans out there. The first type of auto loan is a loan with a fixed interest rate. This means the interest rate does not change the life of the loan. This is the most typical type of car loan. You should also look for other options available to be sure that it’s the best choice for you.
7. Know your Credit Score
Find out your credit score and, if necessary, correct any errors at the credit bureaus. Compare interest rates at banks and credit unions in terms of your personal score, and ask about fees and new payoff calculations. When you’ve figured out which are the best auto car loans, start to apply and try to get pre-approved.
Source: Thinkstock/KatarzynaBialasiewicz
8. Consider Other Lenders
Banks have long since provided customers with auto finance, but these days there are a growing number of non-bank lenders who are offering comparable rates on finance for used cars. When looking for the best price on private party car loans, it is important that you compare a variety of lenders as many of the smaller non-bank loan providers can offer some excellent rates on second-hand car loans. Check out some aggregator sites, or even some online lenders to see if you can find a better rate.
9. Consider your Loan Term Carefully
Since most people who buy a used car will not keep it for as long as someone who buys a new car, most lenders prefer their customers to take out used car loans for the private party over a shorter term. There are some lenders who do offer longer loan terms on second-hand car finance. However, the majority of finance companies who offer cheap rates will only offer shorter term investment options. Consider how long you want to keep your car and determine your term length based on this.
Featured Image Source: Thinkstock/KatarzynaBialasiewicz