7 Tips for Getting an Auto Loan
No one likes to hear that they need a new vehicle. If you could have it your way, your one car would last a lifetime without a car payment. Driving a car can be expensive, especially if you have one that isn’t quite working well. A good car can help ensure you get to work on time and that you’re not faced with mechanic bills every few months. If you’re faced with the prospects of an auto loan, then these tips are for you!
#1. Don’t settle for just one finance quote
When you’re looking for a vehicle, don’t settle for one finance quote. Instead, you’ll want to hunt for the best quote out there. There are companies that want your business, but you need to make them want you as their customer.
Don’t settle when it comes to financing your auto loan. These days, there are tons of credit unions and banks that may be willing to work with you, do your research and it’ll pay off in the end. Find the best auto auto loans by looking around.
#2. Put money down on your auto loan
An auto loan is you borrowing money. So, the more money you put down, the better! A down payment on a vehicle can assure you will pay less for the vehicle over time. It’ll also save you money because you’ll be paying off the principal much faster. You might also be able to get a better car loan because the banks might take you more seriously with at least 20% down.
#3. Pay attention to the going loan rates
Just like mortgage rates, car loan rates also fluctuate. Pay attention to the going loan rates. If car loan rates seem to be too high right now, you’ll want to come back at a later date. Rates are always changing, so you really just need to keep an eye on them. Keep working on your credit and make sure it’s the best it can be, so when it’s time to take out the rate you want, you can get it!
#4. Make Your payments on time
Making a late payment is never a good thing, but it’s not good when you plan on taking out a new auto loan. The best thing you can do is make your payments on time, every time! Making your payments on time shows up positive in your credit report. Always plan to make your payments on time every time and you will see positive results.
#5. Consider a co-signer
Co-signers can help you get a better rate on an auto loan. Keep in mind that you need to have good credit and a decent income to get a good rate on a car loan. If you aren’t sure you can get a good rate and have a decent car payment, then you may want to consider a co-signer. A co-signer doesn’t need to make the payments, but they can help you get a better rate on your auto loan. Even if you’ve never considered it before, an co-signer for your auto loan can be a really good thing.
#6. Purchase GAP insurance
What happens if you get into a car accident and your car is totaled? If your car loan costs more than your car is worth, then you’re going to owe a huge chunk of your loan still. When you’re given the option, make sure you purchase GAP insurance. It can be anywhere from $500-$1000 to purchase this type of insurance, but it can be a lot cheaper to buy this than cover the rest of your loan.
#7. Do your research on the extended warranties
Every car is going to have problems down the road. If you’re buying your car through a dealership, you may have the opportunity to get an extended warranty. This warranty may help cover issues that you run into. Sometimes the warranty is worth it and other times it’s not. You have to make that decision. However, part of taking out an auto loan is getting offered things like an extended warranty. Do what you need to do in order to make the decision that’s right for you!
#8. Keep your auto loan term as short as possible
Naturally, you want a low monthly car payment. However, focus on a shorter loan term instead. The shorter your loan term and the more you pay a month, the more money you’re saving down the road. The idea is to ensure your car is worth something when it’s time to get it paid off.
Getting an auto loan really isn’t as cut and dry as they make it seem. You really need to do your research and know what you’re getting into. You can even bring someone along with you, to help you make the best decisions during this process.