You’ve found the shiny, pre-owned car of your dreams. So now what? Financing a used car can be intimidating. Below are some money saving tips which can give you the upper- hand in making the best financing deal for you.
1. Check your credit:
Credit gives you buying power. It determines the rate and the total amount you will pay over the course of a loan. What a lender looks at isn’t just the FICO score, but how you pay your bills. One late payment can raise your rate as much as half percent. Make sure you get a copy of your credit report before you go shopping. If you’ve had credit issues and need a co-signer, make sure the co-signer has good credit. Even though the co-signer isn’t driving the car, technically they own it too. If you fail to make the payments it will affect your co-signers credit because they will be financially responsible for making the payments on your car, so make sure that you both understand the obligations of that relationship.
2. Come in with extra cards to play:
If you can come in with a pre-approval from an outside lending institution, such as a bank or credit union, you already have the upper hand. According to Nathan Casillas, Finance Manager for Momentum Chevy, “Having pre-approval from a bank or credit union gives the customer an advantage,” he said. You can play this card in negotiating a good deal. It’s the goal of the dealership to not only sell a car, but to provide financing too. Many times a dealership will beat or match the rate of an outside lending institution. Other factors that will also affect a car purchase to keep in mind are the term or length of the loan and the age of the automobile.
3. Don’t get too hot in the seat:
Even though the shiny car of your dreams is sitting on the car lot, you have to be willing to walk away from it. Negotiation isn’t a one-way street, it means every party gets a part of what they want in the agreement. You may not get everything you want, but the question you should ultimately answer is do you feel you got a fair deal? If you can positively answer that question it will make all the difference in your overall purchase experience.
4. It’s all on paper:
The last part of the process is putting your name on the dotted line. Read the contract carefully. You don’t have to read the small gray print, but make sure the contract has the agreed upon terms and the numbers make sense. There are no stupid questions , don’t be afraid to ask the finance manager if you don’t understand something in the contract. It’s all about doing your homework. A little research goes a long way. If you follow these tips you will not only drive away in the shiny pre-owned automobile of your dreams, but you will feel good about the purchase you’ve made and the financing you’ve agreed to. Now that you know how to finance your car, search for one!