Remember These Financing Tips Car Loan Guidelines

Auto Financing- Things to Do and Not to Do

Harry Lloyd

What to watch for

Getting the best financing for new cars is arguably the most important step in the car buying process. It is certainly not as fun as picking out options on your vehicle, but no decision will affect your bank account more than this one can.

Locking yourself into a realistic loan could be the difference in thousands of your dollars over the length of a loan, and transportation being the necessity that it is, you cannot afford to get this wrong.

Before you start your shopping for auto sales, take a minute to check out some of the basic dos and don'ts of finding car loans.

Do

Do get yourself well prepared. First and foremost, this means getting a realistic and practical grip on your budget, and find out how much you can really afford to pay. Remember to factor in all the unexpected prices, like maintenance and fuel costs. Staying within your means is not just advice; it is basically a must if you want to keep your head above water.

Do find out all three of your credit scores. Your credit history affects what kind of financing you will qualify for. It can even determine where exactly you will need to shop at. There are three major scores, and not being sure of all three of them when it comes time to strike a deal can leave you at a big disadvantage.

Do take your time and shop around. Each lender has slightly different criteria that they will judge you on, and if you search around long enough, you can find the best loan open to you. You can then go into a dealership and see if the dealer will offer to beat that deal; it's a win-win situation.

Do all the math! Sit down and really hash out each deal you've been offered. Sometimes taking a bigger rebate is better in the long run, sometimes it's the low interest rate. You'll never know unless you take the time to see what deals are legit and which are just smoke and mirrors.

Don't

Don't go straight into a dealership and assume you'll take care of everything there, including the financing. Not coming prepared is like blindly jumping right into the lions den thinking that you're good enough to make it out the other side alive. Dealers are professionals at manipulating the deal in their favor, not preparing yourself first is giving up all the leverage you could have had.

Don't rush through any part of the entire process. Financing a car is a huge purchase, so you have to read and understand all the fine print. Rushing through and overlooking a major detail could cost you a lot of your money.

Don't stretch your budget at all. Don't tell yourself you deserve that one extra feature or option, before you know it you could have a completely unrealistic monthly payment on your hands. In fact, if anything you should be convincing yourself to scale down your tastes to stay practical.

Don't take the first deal that comes your way. Remember, it's very important to shop around and get the best selection you can. It is also a very powerful bargaining chip if you can convince them that you will walk out on the deal at any moment if things are not to your liking.

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