Save Money On Your New Car- Understand The Difference Between A Bank Auto Loan and Dealership Loans
Financing is a big part of the process when you shop for a new car. Getting a good deal on a bank auto loan or dealership loan can affect how much you could end up paying for your car in the long run. Read on to see how you can find the best available bank auto loan for your new car. Request your free finance quote and compare rates from dealerships in your area today!
Shopping for an Auto Loan
When you walk into a dealership with an auto loan already in your hand, you have additional flexibility and bargaining power. You also will be able to avoid confusing the vehicle price with financing costs. It’s possible that the dealership is able to offer the best terms for financing your new car, but it’s important to do your homework.
Local banks. Banks typically have specific loan policies, and often cater to people who have good credit scores. That being said, local banks can offer very competitive auto loan interest rates. If you already have a relationship with a local bank, that could be a good place to start your search for a bank auto loan.
Local credit unions. Credit unions are institutions that operate like banks, but only lend money to members. Because credit unions are not for profit, the operating costs of the institution are lower and their available lending rates may be better. Often, people become members of credit unions in order to take advantage of favorable loan policies.
Online services. Online lenders are often competitive. Rather than visiting a local office, you can apply for an auto loan over the Internet. Try using CarLoanMatcher.com’s free service to get no-obligation quotes for your loan, you can compare offers to find the best rates.
Dealerships. In addition to loans from auto manufacturers, dealers may work with banks or other independent sources to finance your car. Financing through the dealership is convenient, but the rates they offer include a markup that goes to the dealership.When you get to the dealership with quotes from the other sources mentioned earlier, you might be able to get a better rate than the dealer’s first quote.
While some dealers advertise that they can work with buyers who have bad credit, having bad credit means you may have to pay a higher APR. And keep in mind that accepting an automaker’s special financing offers may mean you have to pass up a rebate. If this is the case, consider taking the dealer’s rebate getting financing from another source.
Get the Best Auto Loan
There are several steps you can take to ensure that you get the best available terms on your dealership, credit union or bank auto loan. When you follow the steps below, you can uncover great loan offers and save money.
1. Look at the Bigger Picture
The terms of your car loan will determine how much you pay now and your overall total loan costs. A low payment now may not mean low total costs for you over the life of the loan. Oftentimes borrowers decide to put a low down payment on a car because it’s easy to manage. That choice increases the total cost of your auto loan and puts you at risk for ending up ‘upside-down, which means that you owe more money to the lender than the amount the vehicle is worth. That’s why a 0 APR auto loan is your best bet.
2. Know How Much You Can Spend
If you are careful with your budget, you already know this. Unfortunately many people don’t put enough thought into this before they start shopping. When you have a clear idea of how much you can afford to spend on a down payment and monthly payments, you risk falling in love with a vehicle you can’t afford and falling victim to a persuasive salesperson.
3. Manage Your Credit
Once you decide you want to apply for a 0 APR auto loan, you should review your credit. Try to make sure that your credit report looks as good as possible, finance companies look at it when you apply for a 0 APR auto loan. If there’s anything on your report that is inaccurate or needs fixing, take the steps to address it. Any errors or negative information the loan officer sees may keep you from getting the car you want.
4. Avoid Prepayment Penalties
Flexibility is key, as things change in life. Your lender should allow you to make extra payments or pay off a 0 APR auto loan early without charging any penalties. Read the fine print with care – penalties aren’t necessarily called “penalties”.
5. Shop Around
Request a free no obligation to buy, auto financing quote today! This will allow you to find dealers in your area who want to work with you to finance your new vehicle!
When you follow these steps, you will be ahead of the game when shopping for a new car, truck or SUV.