25 Car and Auto Loan Tips

 No. 1 Car Loans - The Type of Car You Choose Affects your Loan

When thinking of getting car loans, remember that the loan amount depends directly on the price of the car that you choose to buy.

 

There are many factors affecting the price of a vehicle so why don't you shop around first? Start searching online and visiting and talking to car dealers; you can also start reading car consumer magazines.

 

Most of the time, vehicle consumer magazines group cars into categories, provide frequency-of-repair information, and list down car prices.

 No. 2 Auto Loans - How Much You Can You Afford?

The auto loan amount you wish to get should depend on your monthly net pay.

 

If your loan exceeds 10 to 12 percent of your monthly net pay then you should consider leasing a car instead of taking out a loan on a car. Further, you should take out a loan for the shortest possible period (get a 24-month loan as opposed to one that stretches for 48 months) and make a large down payment while borrowing the lowest amount possible.

 

This will reduce the overall cost of the loan.

 No. 3 Getting an Auto Loan - Knowing ALL The Numbers

When thinking of getting an auto loan, it is important to know how much you are paying, when you are paying, how you are paying, and exactly what you are paying for. Knowing your numbers is an integral part of buying a car.

 

Very low interest rates are sometimes offered by dealers but they won't lower the price of the car. It is often better to pay higher financing on a car that cost less or buy a vehicle with a low down payment.

 No. 4 Auto Loans - Signing on the Dotted Line

Auto loans are just like any other contract - the small print should also be read!

 

You should always be sure to read and understand every word of the car loan contract before you sign it.

 

Make sure to read and reread everything that is written and do not leave anything blank. If you have discussed (and agreed) something with the car dealer, broker or loan officer, make sure this is mentioned in the loan papers.

 

If possible, have it initialed by both you and the car dealer before, broker or loan agent.

 No. 5 Auto Loans - Sources of Information

There are many different sources for information when it comes to auto loans and their costs and rates.

 

Some of these sources include banks, savings and loans institutions, credit unions, and national lenders.

 

It would help to compare national sources to local sources when it comes to financing. The annual percentage rate (APR) should be compared as well as other costs associated with the loan such as loan insurance and loan processing costs. It won't hurt to inform other lenders what other loan sources have to offer so they can also give you the best deal.

 No. 6 Auto Loans - Of Early Payments and Penalties

Before you sign that auto loan contract, make sure that it gives you the option to make early payments.

 

It is also wise to make sure that the contract states that payments will be applied on the loan principle and that if you pay off the loan early, you will not be penalized nor will it entail any extra costs to you. Do not be sweet-talked to by the lender into agreeing to a small fee for early payments.

 

If he does not agree, shop for another lender.

 No. 7 Bad Credit Auto Loan - No More Worries

If you fear that you have poor credit, bad credit or no credit history at all, don't worry, you can still get the car that you like through a bad credit auto loan. These loans are offered by many lenders today to cater to people with bad credit. This opportunity, however, does not come free.

 

A higher interest rate will be applied because you are considered a 'high risk' by the lender. Still, as cars are really more necessities than items of luxury, a bad credit car loan may not be bad at all.

 No. 8 Bad Credit Auto Loans and Interest Rates

Bad credit auto loans were designed for people with poor credit, bad credit or no credit history at all.

For this opportunity, a lender will apply a higher annual percentage rate or APR. How high should you go with these rates?

Although you can concede that you won't get the best interest rates because of your bad credit rate, you should also not be duped by lenders into getting loans with absurd interest rates. A quick search online will tell you what the industry average use; use this as your barometer.

 No. 9 Bad Credit Auto Loan - Improve your Credit Score

There are many lenders out there that cater to bad credit holders so you need not worry that you will not get a bad credit auto loan at all.

However, note that your credit score determines the car loan's interest rates so it is in your best interest to see if you can improve this before getting a car loan.

A first step is to get a copy of your credit report, then scrutinize it and report any errors that may have been listed and are now pulling your credit score down.

 No. 10 Bad Credit Auto Loan - Improve your Credit Score II

Bad credit auto loans may be bad for you.

If you can wait awhile, why not try and improve your credit score first?

Start improving your credit rate by calling the credit bureau to inform them of any errors that occurred or are listed in your credit report. Be prepared to show invoices, bills, ledgers, etc. to prove your claim.

Getting those errors out of your report are sure to increase your credit score which translates to lower auto loan interest rates.

 No. 10 Bad Credit Auto Loan - Improve your Credit Score II

Bad credit auto loans may be bad for you.

If you can wait awhile, why not try and improve your credit score first? Start improving your credit rate by calling the credit bureau to inform them of any errors that occurred or are listed in your credit report.

Be prepared to show invoices, bills, ledgers, etc. to prove your claim. Getting those errors out of your report are sure to increase your credit score which translates to lower auto loan interest rates.

 No. 11 Bad Credit Auto Loan - Take Advantage of Them

A bad credit auto loan may be bad for you IF you do not do your research well.

Still, there are many lenders out there who actually offer decent deals even if you do have a bad credit score.

So if you cannot wait to have a car because you really need it for work, shop around and find the best bad credit auto loan lender. If the deal is good then go for it.

 No. 12 Auto Loans - It's the Car that Counts

Before applying for auto loans, it is important that you know what kind of car is suitable for your specific needs. You should never settle for a car that does not meet your need because of dealer or manufacturer incentives being offered to you.

 

Sometimes, extremely low APR financing is offered by dealers or manufacturers on cars that they cannot sell. Knowing what kind of car you need is also another way of avoiding influences of sales pitches or impulse buying.
 

 No. 13 Auto Loans and Credit Reports

It is important to have a copy of your credit report ready before you go and apply for auto loans.

 

A credit report is one of the first things that a lender will ask to see. Your credit history is important as it is what lenders will use to determine whether they will approve your loan or not. Make sure to correct any mistakes in the credit report before showing it to a dealer or lender.
 

 No. 14 Auto Loans - Should You get a New or Used Car?

Although a new car generally means a higher loan amount in auto loans, there are many advantages to getting a brand new car.

 

For one, buying a new car is better if you keep it for a long period of time.

Buying a new auto also gives you more car models to choose from and you can get the exact kind of car that you want according to your preferences. New cars also have warranties so if something goes wrong, both the car dealer and the manufacturer have more to answer for to you.
 

 No. 15 Used Car Loan - The 'Cons'

Thinking of getting a used car loan? Before you select the used car, take these factors into consideration. For one, although used cars are less expensive, you have less cars to choose from. Moreover, although used cars are initially less expensive, they cost more to maintain.

 

Some used cars need repairs that you may not be aware of until you buy the car and that can lead to high repair and maintenance bills. And lastly, although some used cars may come with warranties, they don't usually cover as much as a warranty for a new car.
 

 No. 16 Used Car Loan - The 'Pros'

Thinking of getting a used car loan? That may not be such a bad idea especially if you know the original owner of the vehicle you wish to purchase. If you know the owner and know him or her to have taken good care of the car, chances are, the car will not entail so many expenses when it comes to repairs.

 

The number one advantage of getting a used car is of course the discounted price. So if you are really tight on the budget, a used car loan is indeed a great option to have.
 

 No. 17 Used Car Loan - Buy a Used 'Company' Car

If a used car loan is all you can afford, make the best out of it by making a good used car choice.

 

Try to buy a used car that was once a company car, a car that was leased, or a car that was part of a rental company like Hertz or Avis. These used cars are still close to their original condition and may come with a warranty or special certification form the car dealer.

 No. 18 Auto Loans - Is it All in the (Car) Name?

New or used, popular car brands mean higher auto loans (costs, rates, and all). 

When buying a car with a brand name, consider its reliability and performance rather than its popularity.

 

There are cars available in the market that may not be as popular but perform just as well as a branded car. Although an older brand name car might be a better deal than a car without a brand name that was used less, an extraordinary car will always cost more to maintain and repair whether it is new or used.
 

 No. 19 Auto Financing Using Online Providers

Getting a good auto financing rate over the Internet although more convenient is not always better.

 

You'll always get a better rate if you meet with an actual seller or dealer.

 

However, the Internet is a good place to do some research on great financing resources (that you can actually go or visit later). These financial sources include your local bank or a credit union. Competitive financing rates are also provided by dealers and manufacturers so look for them on the Internet as well.
 

 No. 20 Auto Loans - Make the Net your New Best Friend

There are so many considerations when it comes to auto loans and the best way to start is to go online. There are many websites on the internet to choose from that provide information on buying a car.

 

These websites not only include specifications about the car but include pricing, reviews, dealer locations, insurance information, financial calculators, and trade in values for old cars as well. Use all this information so that you are better informed when facing a loan agent or officer.
 

 No. 21 Bad Credit Auto Loan - Improve your Credit Score III

Try to improve your credit score before getting a bad credit auto loan as a low credit score translates to high car loan interest rates. One way to improve your credit rate is to try and stay in the same job and in one place for at least six months.

This portrays that you are responsible or are more stable and therefore less of a risk for lenders.

Of course, having a continuous job is important for you not only because it will be the basis of your auto loan but it is the source of your loan payments.

 No. 22 Bad Credit Auto Loan - Improve your Credit Score IV

We all know that our credit score is crucial to getting low interest rates on an auto loan. So instead of getting a bad credit auto loan, why not try and see if you can increase your credit score first?

Try using independent credit reporting agencies. Reporting errors in your credit report can take ages but some really good (and reputable) credit report agencies take just 72 hours to fix an error in a credit report.

 No. 23 Bad Credit Auto Loan - Improve your Credit Score V

You have studied your credit report and you spotted errors in them and now want to embark on the journey of improving your credit score rather than getting a bad credit auto loan.

This is a wise decision but what do you need to do? The first thing is to ensure that you have ALL the documentation that supports your claim that there is an error in your credit report. These can include receipts, invoices, letters, etc.

 No. 24 Bad Credit Auto Loan - Improve your Credit Score V

Do you really need a bad credit auto loan?

If you can wait a bit, see if you can improve your credit first.

Remember, bad credit car loans mean high interest rates which may lead to further debt. Create a list outlining your income and where that money is currently going. If you're in deep debt a financial counselor may be required to help you create a sound financial plan that you would need to follow for the succeeding months.

 No. 25 Bad Credit Auto Loan - Improve your Credit Score VI

Do you have an all-too-familiar last name (e.g., Smith)? If so, your credit report probably has a record or account that does not even belong to you! And if that record is not good, it can pull your credit rate down.

Check your credit report first before you start shopping for a bad credit auto loan. Remember, bad credit loans mean higher interest rates so why pay for this ‘error’ in your credit report if you can fix it and get a better auto loan deal?

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