The first thing that you need to do before you
go car shopping is to find out if you can get financed for it. Most companies require that you bring home at least 1600.00
a month if you want to get a auto loan While it is not written in stone generally people with a credit score of 680 or higher
are considered prime borrowers and can get a loan at a good rate. Scores from 550-680 are considered subprime and will pay
up to 23 percent on their loans and may have a hard time getting the car they want. If your credit score is below 550 chances
are you are not going to get a loan. You MIGHT be able to go through a company that will finance an older car to you at a
very high interest rate but, it’s not worth it.
You also
will want to be careful if you are planning on having a co signature on the loan. Some dealers will say both names are on
the loan but, only put it in the intended co signers name. This makes it impossible for you to insure it under your name.
if you find that you need to do some quick work on your credit
read here.
Keeping the above in mind the first thing you need to do is find out
what car you want to buy. Research the make and model you want and find out what the average price is for the vehicle and
what the resale value is.
The second thing you need to do is pull your credit score. Dealers may try to tell you that your score is lower than
it really is in order to charge you a higher interest rate. Any time you run into a dealer that pulls this scam you should
inform them that you are aware of your credit score and take your business elsewhere. Many people are finding that they get
better deals at credit unions, online auto loan company’s etc. According to the Consumer Federation
of America, car buyers are often overcharged by 3% on their loans at the dealership this costs them thousands of dollars.
Once you have done this you need to secure an auto loan. As you know you may get a loan from the dealer. This may
or may not be in your best interest. Sometimes dealers will offer you rebates if you finance through them. This can be profitable
to you in the end. If you find that the dealers interest rate is higher than what you could get else were; consider taking
the dealers loan then refinance the loan at a better rate.
Something
to remember about dealer loans is that they are really RISC or retail installment sales contracts. These are normally sold
to banks by the dealer and the two company’s split the interest.
Regardless of
where you get your loan from be sure to read the terms carefully before you accept the loan. You dont want to take a loan
becuse of a slightly smaller intrest rate but, find out to late that the loan has a 72 month contract intsead of 36.
