When considering a used vehicle, there are many car dealership financing options available to you. Perhaps the most convenient method of financing a vehicle at a dealership is to use their finance and insurance (F&I) office to submit your credit application to multiple lenders in order to help you get the best rate possible. While the F&I office can offer competitive rates, it is also a profit center for the dealership, so you need to make sure that you do not get taken advantage of when completing your financing paperwork. The following explanation of car dealership finance dos and don'ts will help you secure the best car dealer financing terms possible.
Before visiting the dealership, learn more about your credit history and your credit score. Although getting a full report with credit score does cost money, it will help you gauge what term and rates you may qualify for. By examining your credit report before visiting the dealership, you can also dispute incorrect information by contacting the credit bureaus or making use of a service like MyFico. By cleaning up or at least noting any inconsistencies on your credit report, you can know what to expect if a dealership finance manager mentions why you may be approved for a loan at a higher rate than expected. After reviewing your credit information, you can use tools like Bankrate.com to determine what rates are available for individuals in credit situations similar to your own. You can also use online payment calculators to help you determine what out the door price and monthly payment work best for you. You can use this information to help you negotiate the best car dealer financing terms when you arrive at the dealership.
While at the dealership, let the finance manager take your credit information and submit it to multiple lenders. You do not need to worry about excessive submissions impacting your credit score, as even a large number of inquiries for the same purpose (for example, a car loan) are considered as one "hit" on your credit report, so long as they occur within approximately one month of each other. Depending on your credit situation, the dealership may have multiple competitive offers for you, or they may have difficulty securing financing altogether. That is why it is also important to speak with local banks and credit unions. Have these quotes available before you visit the dealership, that way you have pre-arranged financing should the dealership be unable to beat the quote or secure financing. Even if the dealer has a great offer, do not at any time feel pressured into signing a contract without understanding all terms and conditions.
Finally, do not fall in love with a single vehicle at a since dealership. If you let this fact be known to the dealership, you may get an inflated payment, inflated interest rate or unwanted aftermarket items included in your contract, just to help raise their profit. While aftermarket items like GAP insurance and service contracts are helpful, they are normally available for a lower cost by purchasing them directly through your bank, insurance agent or a third-party provider of used vehicle aftermarket products.
