Any time you are looking to borrow money for a large purchase you need to shop around for the best deal. Depending on the time of year and the state of the economy the difference in interest rates affect how much you will pay over the length of your loan. When you are shopping for a new or used car keep these tips in mind.
Many dealerships offer special incentives when financing a car. Some shoppers take it for granted that this is the best deal they can get and end up paying more for their automobile. Before you begin shopping for a car talk to your bank or credit union. Ask about getting a pre-approval for a loan and determine how much you can afford to spend. When you approach the dealership and begin negotiating the price of the car, make sure your salesperson knows you already have financing through your bank, but don’t reveal how much you can spend. Sometimes the auto dealer will match your bank’s loan rate to get your business.
You also need to understand your credit score. Before you think about buying an automobile check your credit and make sure your credit score looks good. If there are problems, consider fixing the issues before beginning to look for a car. A car payment is a long-term commitment and you need to be realistic about how much you can spend. You do not want to ruin your credit with a car payment that is more than you can afford.
Before shopping for an auto loan determine how much you can offer for a down payment. If you have been saving money, decide how much you want to use for your auto purchase. If you have a trade-in, research the value and decide if you want to sell the car on your own or trade in with the dealership. Remember: You will not get as much money for your car as a trade in, but it may be more convenient than trying to sell the car yourself.
Shopping for an auto loan and understanding your options is the key to getting a good deal on your new or used car purchase. If the salesperson realizes you have done your research and you know exactly what you want, it will be less likely you will pay too much for your new ride.
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