7 Ways to Get the Best Car Loan

7 Ways to Get the Best Car Loan

 

Let’s face it; most people do not enjoy the prospect of finding and obtaining a loan for their next vehicle. You can shop around for a loan before looking at cars or start looking for financing after you find the perfect vehicle. Either way, you want to make sure your car loan serves your best interest before anyone else’s. The team at Highline wants everyone to understand the impacts of a car loan, and how to make the best possible choice. Here are some tips on making sure you know everything you need to get the best car loan. 

Research How Your Credit Score Will Affect Your Interest Rate

It’s time to do a little bit of homework and evaluate your own credit score. Higher credit scores mean lower interest rates, as lenders see your credit historyas how likely you are to pay your debts in a timely manner. If you have a positive credit history and an above average score, they are more confident in granting you this loan and knowing it will be paid. Lower credit scores will yield higher interest rates. Although there are some concrete facts when dealing with loans and lenders, the market also fluctuates with the rest of the financial industry. As of 2018, the average auto loan termis 60 months and has an interest rate of 4.21%

Aim for A Short Loan Term to Finance A Used Car

Used cars usually have higher interest rates than new cars. Rather than going for a longer loan term in hopes of saving money on your payment each month, find a loan that has a shorter loan term. Overall, this will help you save more money on interest. But why do loans on used cars automatically get higher interest rates? For the lender, it is seen as riskier to have a used car as collateral instead of a new car. There is a lack of upfront knowledge that is usually assumed with new cars, such as their depreciation and knowing that the vehicle will likely be in good condition for a longer amount of time. Although you can’t avoid the higher interest rate, you can ask to see loan options that allow you to pay off the car over the course of two or three years versus five or more. 

Focus on The Total Loan Amount – Not the Monthly Payment

Although it’s tempting to immediately calculate how your loan payment will affect your monthly budget, it is best to wait to do this until you find a loan that seems fair. You want to look at the bigger picture. Calculate the total cost of the loan including interest and compare that to a shorter loan amount and lower interest rate. Do the mathon all your possible options to figure out how much you would be spending overall, instead of focusing on your monthly payment. Although longer loan terms will often reduce your monthly payment, they usually have higher interest rates, and that means you will end up spending more than you might save.

Be Smart About How and When You Apply 

At Highline Automotive, we recommend getting pre-approved before you begin looking at cars. That way, you’ll walk on to the lot or start looking through the online inventory knowing that you are a qualified buyer. In addition, getting pre-approval tells the dealership you might be paying in cash, so they are more likely to focus on persuading you with the price of the car instead of the monthly payment. If you want to shop around with dealerships or lenders, make sure you apply for all financing options within two weeks, so you will only get one hit to your credit score and not multiple. When considering larger purchases that require financing such as a car, credit bureausexpect to see many applications in a short period of time and won’t penalize you for every single inquiry. This is just one of the ways you can avoid a potential negative impact before you even get started with one lender.

Read All the Fine Print

Make sure you are aware of all feesand know how to avoid them. Understand late fees and how missing a payment due date by just a couple of days can trigger those extra charges. Also check for prepayment fees (paying the loan off in full before the end of its term), high document fees (a dealership’s charge for processing paperwork), a charge for making multiple payments in a month, and more. Although a lot of fees such as taxes and registration will be straightforward, checking for hidden fees before signing could save you from having plenty of headaches later. 

Know Your Rights Before Signing Any Auto Loan Paperwork

As the buyer, you are the one with the power. Before you sign anything, make sure you have had the chance to read over absolutely everything, and ask questions of your salesperson. Make sure the dealership is giving you the same or better deal as the information you received after pre-approval, or that the terms on the paperwork match the terms that they told you about while walking around on the lot. If the dealership squirms while you’re asking questions about fees etc., you can walk away. As a customer, the service is part of what you’re paying for with the car. If they can’t explain every fee or outline every process, you should take your business to a dealership with a finance team who will work with you throughout the entire process.

Remember That Refinancing Is an Option

You may end up in a situation where interest rates are a little high across the market, or your current financial situation makes a higher interest rate or a longer term mandatory for you. You might be between jobs, buying your first car right out of college, or just need to make room in your budget for other things. Even if you end up with a loan that isn’t ideal in the long run, you can refinance in the future. Just make sure you wait a little while into your loan, and that your credit score has improved by making timely payments in the beginning of your initial loan. 

 

At Highline Automotive, we offer a large inventoryof used cars, trucks, and SUVs, offering both foreign and domestic brands, including Audi, BMW, Chevy, GMC, Ford, Mercedes-Benz, Chrysler, and Nissan. We only select and sell pre-owned cars that meet our rigorous standards. Each vehicle goes through a 99-Point Certification 

Process, and a Safety and Mechanical Inspection. 

 

We provide a FREE 90-day or 3,000-mile powertrain warranty on every single vehicle we sell. And if you decide to purchase an extended warranty, we offer a simple, affordable pricing structure and finance experts that can help you get the best protection for your vehicle. 

 

Our entire teamis dedicated to making sure every single customer gets the Right Car at the Right Price. We’ll help you get affordable financing with 60-Second Pre-ApprovalsWe are conveniently located right off I-95, at 4343 Torresdale Ave, Philadelphia, PA 19124, and is an easy drive from Bucks County, Montgomery County, Chester County, Delaware County, Delaware and South Jersey.

 

 

 

Categories: Pre-Owned Inventory

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