Whether you intend to purchase a new vehicle or a used vehicle, buying a car requires a significant investment of monetary resources. Naturally, you're going to want to get a good deal so that you won't end up spending more money than necessary. How can you accomplish this? Do your research and create a buying plan.
How to be an Informed Car Buyer
As a consumer, literally the last thing you want to do is show up at a car lot with no clue about what your credit looks like, what your budget is, or what your driving requirements are. In order to have a good car buying experience, you don't need to learn any "tricks." You can purchase your vehicle like a pro by just being informed, proactive and aware.
- Know your credit score and the contents of your credit report. There is no charge for checking your credit reports. You can obtain a copy from each of the primary reporting bureaus (TransUnion, Experian and Equifax) once a year by visiting AnnualCreditReport.com. Your credit score will not be included with your report, but you can easily obtain your rating (possibly for a small fee) through a number of sources.It is important to know the condition of your credit because this will directly affect the kind of loan that you will qualify for and your interest rate. If your credit is good or excellent, you should be able to obtain financing from a bank or credit union, and you can negotiate a prime or near-prime interest rate. If, however, you discover that your credit is damaged, you may need to find a dealer who works with special finance lenders.
- Realistically assess your needs and budget. You may find that there is a big difference between the car you want and the vehicle you can actually afford. For example, if you are a single person on a strict budget, now may not be the time to buy that giant, fully-loaded SUV that you have had your eye on. Smaller, fuel-efficient cars can be incredibly fun to drive, and, in the long run, you will enjoy your vehicle much more if making the payments doesn’t cause financial struggle.
- If possible, have a down payment. While those No Money Down offers may seem enticing, they may not work out very well for the majority of buyers. Having a down payment is incredibly beneficial for a few reasons. First of all, if your credit score is weak, the ability to provide cash up front on your purchase may improve your loan approval chances because it lets the lender know that you're serious about your purchase. And any money that you put down subtracts from the amount that you will be financing, so you will pay at least a little less in interest in the long run. Finally, a down payment will help build equity in your vehicle and reduce your risk of becoming "upside down" in your loan.
- Pay attention to the total cost of the vehicle. Most car buyers have a tendency to focus on the monthly payments, and for good reason. It's important to know what your budget will look like from month to month. However, when you are working out the financial details of your car purchase, being exclusively concerned with the monthly payments may cause you to overlook unwanted charges and fees that could have been avoided. So, take a close look at the total amount that you will be financing as well as each item listed on you purchasing contract. If anything seems overly expensive or questionable, alert the finance manager and ask for an explanation.
A few key points to remember when shopping for a car are: 1) Know where you stand with your credit 2) Always keep your actual budget in mind and 3) Pay attention to every detail of your contract. And, finally, if you know that your credit is less than perfect, get help with finding the right dealer.
Financing Assistance from the Pros
If you are worried that less than perfect credit will prevent you from getting auto loan approval, Drivers Lane is ready to help. You don't have to search all over town for the dealer who is qualified to handle your situation. We can connect you with a dealer in your area quickly and at absolutely no charge.
All you have to do to start this simple process today is fill out our fast and secure online application.