Are you looking to finance a new or pre-owned car?
Having the right information at your fingertips will make you a smart buyer—and save you a small fortune while you are at it, too. The first hack to keep in mind is while shopping around for the cheapest car loan makes a lot of sense and helps save some cents, there are more options you can consider taking advantage of to get the best auto loan deal around.
Here are seven insider tips you can easily use to research, find and finance a car you can afford hassle free.
- Take Advantage of your Credit Card Protection Just In Case
If you have a pile of cash to spend on a new car you are best positioned to get the cheapest auto loans around.
But even if you chose to buy cash, you might use your credit card to pay up a small amount such as $150. Doing so makes your card company jointly liable with your car seller in the (hopefully unlikely) instance where something messed up.
You can then clear the amount in the following month or months just to be sure.
- Choose the Best Auto Loan Company for Your Needs
Many people will often consider getting an auto loan from a big bank or large online auto loan provider. But you might miss out on even better car loan deals from smaller, more specific lenders near you.
For example, credit unions almost often offer auto financing at better interest rates (APR) than banks and online auto loan lenders. The caveat is you need to take your time since many credit unions take theirs before they can approve you for a loan. So if you have less-than-excellent credit you might not take advantage of this.
However, the best online auto loan provider might help if you need a bad credit auto loan approved fast. Many of them offer a catalog of car buying resources such as cost calculators to help you know what obligations to expect.
Be sure to use such resources to compare several auto loan vendors before approaching any one.
- Use A Personal Loan to Purchase your Car—If You Can
Taking a personal loan to buy a new or used car is the cheapest way to finance your next car purchase, coming only second to buying the car you can afford cash.
However, one of the big mistakes you can make is to secure the loan with your home which puts it at risk in case your repayment plans falls through. Another thing is affordable personal loans from realisticloans.com are often a preserve of people with good credit.
If you have a less-than-average credit score, you might want to research the best bad credit auto loan provider nearest to you.
Also, keep in mind that you might not be able to borrow for the period of the car personal loan.
- Shop for an Eligible, 0% Interest Dealer
Indeed, you can get a 0% car loan—but only if you put in the research bit and be willing to ask questions. Some of them do not readily disclose this option unless you explicitly ask if they do offer anything like it.
Others will counter such an offer with a rebate, so you might want to do your math and consider which option works out to save you the most cash over the entire loan period.
One of the best places to finance a car with 0% interest is at a manufacturer’s dealership. You can check out the likes of Ford Credit, Honda Financial Services or Toyota Financial Services for a foreign car.
- Get into the Details—It Pays
Also note, sometimes a lender will offer special discounts for specific reasons.
For example, the U.S. Bank offers about 0.5% interest off on your EPA-certified ‘SmartWay’ vehicle purchase. And there are about 25 car options you can choose from in case the thought of driving an electric car haunts you.
Still, your lender can slash your interest rate if you choose a car with a certain mileage range or number of years—especially if your used car choice is under six years old.
- Keep your Loan Repayment Plan Short
Car-buying site Edmunds found that the average new car loan period covered 68 months in the past year while the average used car loan covered 63 months. They also found out that many buyers took up longer (more than four years) loan terms because they found the car they wanted was more expensive.
But, a significant number of new or upgrading car owners choose a longer repayment term because of the attractive low monthly installments. Yet, the longer an auto loan covers the more expensive it becomes in total.
For example, taking up an $18,500 auto loan with a 5% APR for 3 years will cost you $19,960 ($554.46 in monthly payments). The same principal amount stretched to 6 years may require a seemingly attractive $297.94 monthly payout but the overall loan cost adds up fast to $21,451.77.
That’s a $1,491.77 difference, which might not seem like much over six years but still counts.
- More is Always Better, Anytime
If you have to find a car loan vendor why not partner up with the best, all-around auto financing company around.
While you might have to dedicate a little more time and effort, here are some of the amazing benefits you are likely to accrue:
- A great refinancing option in future
- Help with a stalled car
- Help with claiming insurance payment in case your car gets damaged
- Tracking and recovery in case the car gets lost
- Keep the Extras Separate
Be sure to relegate insurance, taxes, upgrades and so on monies out of the auto financing plan with your lender. That would help you save yourself hundreds of dollars in increased interest rates over the actual car loan principal.
So dedicating a little more time to researching your next car financing provider will help find an affordable car loan hassle-free.