How to Shop Smart for Auto Loans
It’s no secret that there are some pretty attractive vehicle bargains out there and with automakers coming up with all sorts of ways to increase business, the task of finding the best financing to drive away in boils down to smart shopping. With the many different advertised financing options such as 0% financing, cash-back programs in addition to the different lending institutions such as credit unions, traditional banks, F&I’s and auto dealers themselves, shopping around will require a little research, advises direct payday lender, Pay1Day.com.
Aside from alternative payday advance loans, auto loans, along with most other types of credit, is not as easy to obtain as it was before the financial meltdown. Back then, consumers had it easy: having multiple loan offers from banks and lenders was common and the tough part was picking the best option. Unfortunately, this is no longer the case: loans are more difficult to obtain, even with good credit. However, with a little research, one may still be able to get an auto loan and negotiate better terms. The key is to get a pre-approval in hand when you’re ready to buy.
Part of the research involves knowing that lenders offer different loans. The majority of lending institutions have a niche that they cater to: There are lenders that service those with great credit, mid credit, and not-so-great credit. Knowing which you might fall under would be of a great advantage, saving you time and money.
Some find credit unions a good place to start your auto loan shopping. Having performed well even during the financial crisis, holding about 37% of auto loans, credit unions usually have better deals than other types of banks. Payday lender, Pay1Day.com says, “If you can get a pre-approval at a credit union, use it as a standard for comparison and have better negotiating power.”
Although interest rates are low, thanks to the Federal Reserve’s efforts to boost the economy, it is important to understand that the total cost of purchase is what you should be gauging, not just the interest rate. Specifically, factor in the vehicle’s selling price and the loan’s terms. Is your lender offering you a rebate or 0% financing? Factor that in with the associated vehicle price and then figure out the total cost of purchase before you make the decision. Furthermore, not all advertised deals, such as 0 percent financing deals are available to everyone. So be prepared for a situation to walk away if the total cost of purchase is not right for you, even when you are absolutely in love with the vehicle.
Although credit lending has tightened, there are loan options available. With a little bit of research and negotiation skills, you can secure a better loan for you and walk away in a new car with confidence.