Lessons Learned from Years with Cars

What You Should Know Before Applying for Dealership Car Finance Now that you have been offered a great deal at a dealership, your work is done, right? No, this is not the case. Sometimes the financing portion of the purchase is more difficult than the negotiating part. This is especially the case if you are not well prepared. Read on to know how to prepare you and ease the process of applying for financing. What are some of the things you should know about auto dealership finance? Some of these include: The Interest Rate The interest rate charged on the loan will determine how much monthly payment you will make. If the dealer charges you a low rate, your monthly installments are bound to be low too.
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There are several factors that determine what rate you’ll receive on your loan. One of the factors that will affect the rate is your credit score. Before starting to shop for a care, get a copy of your credit report. Knowing your score will help you know if you’re getting a fair rate or not.
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Term of the Financing Another important thing to consider is the term of the loan. Just about a decade ago, majority of loans were given for between 1.5 and 2 years. However, today you can get loans of longer terms especially for high end vehicles. Today, it is common to find a loan whose term extends to five years. Some lenders even offer car financing with terms of about 8 years. The reason you need this information is so a sneaky dealer doesn’t trick you. When applying for financing, it is crucial to ensure the rate you are being given is suitable for your credit score range. You should also carefully consider the term of the loan you are applying for. Generally, you should avoid car loans whose terms stretch to over five years. If you need to finance a car for that long to afford the monthly payment, then you can’t afford that car! There are many cheap vehicles you can buy with short term loans than the one you wish to buy for a long term loan. You may hear a salesperson asking you, “How much will be comfortable paying for this car?” This is a trap – don’t fall into it! When you indicate the payment that you will be comfortable with, the salesmen will have a ground on which to start profiting from you. You can end up in a deal where you don’t know how much you are truly buying the car for, how much interest you are charged and what is the term of the loan. Payments are important, but don’t ever become a payment buyer.