Auto car loans- what to watch out for
One thing to know about a used auto car loans is that you must be well prepared. Many people go to a dealer, sit on the desk, get served with some old black coffee and the dealer tells them what a sweet a deal he has gotten for them. And the next moment not only have you bought a car from him/her, you are also financing the car from the same institution. This is a big "no-no." You should always get financing through another independent lender before you step into a car dealer’s office. You can save a considerable amount by going elsewhere.
Financing a car through the dealer is always more expensive than getting a car loan from a bank. The majority of auto car dealers make a lot of money from these financial loans rather than from the actual sale of the car. So once you have seen the car you want and know the price, go elsewhere for the loan.
And never tell the dealer how much you can afford a month. This gives them the advantage to jack up the interest rates to that particular amount.
All over the bill boards, you will see lot of ads claiming there is zero percent financing. No down payment, pay no interest. However, there is always a catch to that. Many companies will say that there have zero interest loans or you can get a rebate for a few thousand. And then the dealer will probably sit down and tell you all the benefits of going with a zero percent loan. And in all cases, you do the wrong thing. Getting a rebate and going through a bank loan elsewhere is much cheaper than going with a zero interest loan. You will definitely save some money at the end of the day.
There are many people today who simply walk into a lenders office with no idea about their credit score. And this is a big negative. If your credit score is bad, then the chances of you getting a loan are slim, and even if you get a loan, the rates will be high. The dealer will always tell you that he/she is trying to be nice to you and doing you a favor by providing you a loan with a high interest rate. Do not fall for it.
Everyone who wants credit should always first get their credit report and look at. Make sure there are no mistakes in it that will harm you. Once you know there are errors, you can get them rectified. Also if your credit score is bad, there are things you can do to improve your score. Go and pay of your credit card bills or your rent. The cleaner the record the better the chances of getting a good loan with low interest rates.
Things you need for a Used Auto car loan: What To Prepare For
Getting an auto loan nowadays is relatively difficult. The current economic crises have all lenders evaluating each potential customer as a default. However, that does not mean one can’t get a used car auto loan. You can improve your chances of getting the loan by being well prepared. All lenders are looking for customers who are low risk and will pay off the loan. While some lenders will not ask you for a lot of documents, the majority will ask you for many details. Before you walk into a lenders office you should have the following:
Income: Whether you are a solo business owner or work for someone else, it is vital that you bring evidence to show that you have a steady income. Having two pay slips from the last year will not cut it. You may bring in a few pay slips but your tax form for the past several years may help. Bring in your pay stubs. Any type of income that you have, you should have evidence of it. If you are getting a rental or have child support, bring the evidence. You can have the best credit but if you do not have an income, chances are you will not be getting a car either.
Credit history: Today, all lenders will ask you for the credit report. Make sure that you have a list of all the loans that you have had and what is the status. If you have had a solid record of payment, bring the credit report with you. Many times your bank may submit a statement on your behalf if you have had no problems paying your loans back.
Residence: Besides having a steady job, most lenders want to know about your proof of residence. If you have been living in a different state every 2 months, it does not look great. You must have proof of residence in one place for preferably 4-6 months to qualify for a loan. Having a PO Box number will not help.
Vehicle data: if you are panning to get a new or an old car, you will need to show the model, make and VIN of the car.
Car insurance: Many lenders will ask you for proof of car insurance. If you already have a car, bring in the car insurance papers. In general getting a used car auto loan is not difficult.
In general, getting a used car auto loan is not difficult. The lenders do have to loan money in order for them to be in business. So if you do your homework right, there should be no reason why you can be denied one.
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2008 by V.P.I.
All Rights Reserved
So you’re in the market for a used car huh?
Well you’re probably going to need to get a used car loan and do some investigative research as well. Before heading over to the used car lot you should have an idea of what kind of car you want.
Research, research, research before you buy. Use websites such as kellybluebook.com to find an accurate price for the car you want.
If you have bad credit and you want a used car you really need to be careful. Dealers will try and scam you and hit you with a deadly high interest rate that could have that twenty-thousand dollar car turned into a thirty-thousand dollar car in a few years.
If you have very bad credit try and work out the car loan first with your bank before going to the lot. This will save you a lot of headaches and you can make an informed decision without a salesman breathing down your neck. Here are some things you should have done before heading to the dealer.
Doing this research ahead of time will save you trouble down the road. There’s nothing worse than figuring out you can’t afford a car when you’ve already signed the contract so if you fail to prepare, then prepare to fail.
And always remember the 3 golden rules:
- Find local used auto loan rates
- Research you car to find a median price
- Avoid financing extended warranties into the loan.
The Internet and Used Car Auto loans
If you are thinking of getting an auto loan, the last thing you should ever do is simply walk into a financial office/bank or ask a lender for money. This comes much later.
Today, one can get the best rates for an auto loan by doing some finger walking. Go to your computer and search for used car auto loans. But make sure you have a copy of your credit score and the Vehicle identification number (VIN) with you. This number is etched on the right hand side of your car or any of your car’s legal paper work should have it. If you have already looked at a car and you want to buy, make sure you have the model, year and VIN of that car too.
If you have never applied for a credit report, you will need to get one. No institution will lend you money without this report. Each individual in the US is entitled to one free copy of their credit report each year. Some lenders will automatically give you a free report as part of the loan deal. Once you get your report, you need to see where you stand. If you have a low score, the chances of getting a loan are slim and even if you get one, the interest rates may be high. So understand your credit report and check to make sure there are no errors in it. If there are, get them corrected. The higher the score the better the chances are of not only getting the loan but also decent rates.
Once online, start writing down the quotes you get from each lender. Get the interest rates and the duration of the loan. Once you have compiled a list of about 10-15 auto lenders, sit down and compare them. Do not go for the cheapest. Look at the duration of the loan, interest rates and any other hidden fees. Once satisfied with the one you want, go back to the site and read the fine prints to make sure that what type of penalty exists when missing a single payment.
Do not just rely on the Internet to search for the best car loan. Go and check out some of the local banks and financial lenders and see what they have to offer. You will again need the same information that you required for your Internet search. Once you have the other rates, try and negotiate the best rates for you. And always read the fine prints.
Car dealers know that you’ve probably been turned down before so they feel they have the upper hand.
Used auto car loans
There are many sites on the Internet that offer used car auto loans. The majority of them offer an online quotation service which only takes a few minutes to complete. To get a quote, you will need you car make, VIN and model. In general, the majority of lenders have similar interest rates and loan duration. But some of the lenders also offer other benefits which you may not be aware of- so one has to ask.
Some lenders do require a down payment and others do not. 100% financing is available from a number of lenders. Depending of course on your credit rating.
Some of the lenders also ask you to provide them with your bank account, so the monthly payments are deducted automatically. For this convenience and less paper work, some lenders will give you a small discount. So do not forget to ask for this option of payment. And in any case, you really do not want to go to the institution at the end of every month and stand in a line.
If you have a credit card in good standing with the lender (e.g. Bank) in question, and have never defaulted in payments you may also be eligible for a discount.
Some lenders also have arrangements so that you can get auto insurance from one of their agents right away. This only applies if you get the loan from them. However, you should always think about getting insurance right away. Go home and check out a few companies before you sign up.
While some lenders will recommend that you put up collateral or some type of guarantee, the last thing you should ever do is put up your home as collateral. The decision to secure your home for a vehicle loan requires one to understand the risks associated with this type of financing. While the lender will always make it sound like a great idea, it is in fact a very last resort. If you decide to use your home as collateral, then you must make all the necessary car payments on time. There can be no mistake about that. Failing to make a payment, means you can end up in a perilous position of having to sell your home. And you will not even have a car to sleep in either.
In general, be prepared and do not get a loan which is excessive. You want to borrow money which you can pay back in a reasonable time. And most lenders will help you do that.
Get your credit report and credit score online.
Secure a used car loan before going to the lot.
TRICKS:
Some tricks that a dealer will use is to have you co- sign a loan with someone else.
