It’s time to invest in a new or a high quality used vehicle. How will you go about structuring the financing? By choosing to follow these five tips, you are likely to end up with the best auto loan terms and conditions.
Check Your Credit Scores
You have no idea which bureaus any given lender will use to research your credit history. It’s safe to assume that most lenders will request reports from at least two of the three main credit bureaus. Since the data found on each one can vary slightly, it’s in your best interests to know what’s in them in advance. That will make it easier to quickly respond to any questions a lender has about what they read in those reports.
Compare at Least Three Lenders
It’s important to find out who has the best reputation in terms of fair rates, reasonable fees, and loan payments that will fit into your budget. It also helps to know which lenders offer the best in customer service and support.
Always seek to find three viable lenders who seem to be a good fit. Compare them point-by-point and it won’t take long to see who you should approach first. Assuming your first choice offers a deal you like, there will be no need to look any further.
Make A Higher Down Payment
Your down payment has a direct impact on the amount that remains to be financed. While a few dollars will not make much of a difference, a down payment that is several hundred dollars more than what’s required will result in more manageable payments.
You’ll also end up paying less interest on the loan over time. That’s because there’s less to finance in the first place. Think of what you can do with the money you save with this one strategy.
Keep the Loan Term as Short as Possible
How much would your monthly auto loan payment be if you financed for two years instead of three? Many people are surprised to learn that the difference is not that much. Assuming you can manage the shorter term without creating financing hardship, do so. A shorter term also means less interest to pay and more money that stays in your pocket in the long run.
Pay Fees in Cash
Along with making a larger down payment, look into paying any miscellaneous fees in cash. If you don’t, those fees are added to the balance of the loan and increase the total amount of interest you will pay. This will keep the installment payments a little lower and make the loan easier to manage.
Don’t settle for the first lending opportunity that comes your way. Compare multiple lenders and do what you can to keep the total amount that you finance as low as possible. With the right approach, you can end up with a vehicle you love and payments that will not leave you broke at the end of the month.