Are you in the market for a new car loan? The process of finding the right one can be overwhelming yet necessary.
Think about it. Buying a car is a financial agreement that you’re committing to for the next five or more years. Needless to say, you will want to find the right fit for your financial situation.
But how to go about doing that? What techniques can you use to find the right type of auto loan for your needs?
Here are several tips on how to find the right types of car loans for your situation. Be sure to consider them all!
1. Shop Before You Buy the Car
Many people fail by not shopping around for a car loan prior to visiting a car dealership lot.
Not shopping around leaves you at the mercy of whatever loans the dealer can find for you, and you’d better believe that those loans don’t have your best interests in mind.
Instead, try to shop around for the right type of car loan before you look around for cars.
This will help you in two ways. First, it will help you to find the best rate for your financial situation. Secondly, it will help you set a budget for your car-shopping endeavors.
For example, if you find a car loan you like that’s for $17,000, then you know you can’t purchase a car that’s even a cent over that price. This will help you in negotiation talks as well, as the car salesmen have to abide by the total price on your loan.
2. Ask Valuable Questions
The only way to make sure you’re putting yourself in business with the right car loan provider is to ask questions.
Don’t hesitate to ask as many as you need to. The providers are expecting you to have them.
What does the application process look like? Will there be a credit check performed? Do you have guaranteed approval? What’s the maximum amount that you can borrow? Do they need collateral to receive the loan?
All of these questions will help you understand the process and what you can expect prior to receiving the loan.
Even asking things like how you’ll be paying the monthly amount can help assure you that you’re working with a car loan provider with integrity.
3. Give Yourself Two Weeks
Both the car shopping process and car loan shopping process can get to a point where you’re shopping a little too much.
At some point, you have to say “enough” and make the best decision about the offers that you’ve received.
For that reason, it’s healthy to give yourself a two week period for you to look around for car loans. You can do as little or as much shopping as you want at this time, but two weeks is all that you’re allowing yourself.
At the end of those two weeks, you’re going to make a decision on which auto loan provider to go with.
This will also help you stay on track with the car buying process. As soon as your two weeks are up, you know that you’ll start going to car dealerships with the loan offer that you chose.
4. Set Your Budget After the Loan Is Offered
As previously mentioned, the car loan should be used to dictate what your budget is for your new car.
Too man people make the mistake of setting a budget before receiving the right auto loan. As a result, they get a loan that has higher interest rates or is expanded to a longer time frame to give the appearance of being a lower price.
By waiting until the loan offer to set your budget, you’ll be setting yourself up for success with finding the car with a high return on investment.
You can also factor in things such as a down payment to receive the car that you have your eyes on.
For example, say your car loan is for $15,000. Because of that, you might be able to justify placing a $2,000 or 3,000 down payment in order to receive that used sports car that you’ve had your eyes on.
5. Fixate on the Loan Amount
Depending on where you shop around for your car, some lenders might try to trick you into thinking you’re getting a sweeter deal than you really are.
One of the best ways to keep your “eyes on the prize” is to focus on the total loan amount, not the monthly payment amount. There’s no stunt a lender can pull to trick you if you’re aware of the total cost.
The most common “trick” is to offer you a lower monthly payment than the other offers that you’ve received, which looks great on paper. That is, until you realize they extended the loan twelve more months.
As long as you focus on the total all-in price of the loan, no one can lead you astray.
Trusted car loan providers will focus on giving you the total amount that you need. Both you and they will work hard to find a way to meet the price you’re searching for.
Now You Know How to Find the Best Types of Car Loans
Now that you’ve learned how to find the best types of car loans, it’s time for you to start your search.
Be sure to read this article on how to get a loan faster, even if you have a poor credit score.
For more inquiries, feel free to reach out using our online contact form, and we’ll be happy to assist you further!