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Shopping for a car is a daunting task, but it’s essential to have an excellent automobile to get you where you need to go. Not only do you need to find the perfect vehicle for your family, but you must also consider the financing. Unless you’re lucky enough to pay cash, you’ll need a loan to cover the costs.
Financing a vehicle has changed over the years, and creditors have become even pickier when lending. Unless you have a solid knowledge of the industry, you may feel lost or confused by this process. However, there are numerous things that you should know before you make a purchase, and these tips will help you get a good deal. Here are some things to consider before you head to the dealership.
When you see advertisements that state zero money down and no payments for six months, you better believe there are hidden costs somewhere. This is nothing more than a marketing ploy to get you into the dealership. If you worked the numbers, you would see that they've tacked on the extra somewhere. While there are some excellent deals to be had, you must make sure that you read the contract and go over it with a fine-tooth comb.
You may see offers for rock bottom payments for $349 that seem too good to be true. There's always fine print, and you must make sure you read it. The fine print will tell you that this offer only applies to well-qualified buyers. What does the industry consider a well-qualified buyer? This means you must have impeccable credit and usually a good chunk of money as a down payment. Typically, someone with a credit score of 740 or above fits into this category.
There are always tons of additions that you can consider when you make a purchase. Do you want rust proofing, tinted windows, gap insurance, and an extended warranty program? These additions can significantly impact your payment. The worst thing you can do is get upside down in the loan and then have a vehicle that you can't get rid of without serious money out of pocket. Think long and hard before you add these extras or do any upgrades to the loan.
Did you know that you don't have to use the financing offered at the dealership? You can get your funding with whatever bank you want to use. You can often get a better rate at a bank that you're familiar with and have used for years on other loans. Most car lots have preferred vendors they work with so that they will get a kickback from the loan. Some even have lenders in-house that are dedicated to their business. However, you can get a car loan preapproval from numerous places and know your credit score and purchase abilities before you shop. The fantastic thing about living in such an internet-driven society is that you can get pre-approved without leaving your home.
The price you see on the car's sticker isn't what the dealer paid for the automobile. Many people think there's no bartering when charging a rock bottom price close to what they paid. Some dealers will even tell you that they have a "no haggling" price point so that you get the best deal, but make sure you don't fall for their marketing ploy. The price you see is the manufactuer's suggested retail price and it's not what they paid. They buy these cars in fleets to get a good deal. Sure, they have a price point they can't go under, but what you see on the sticker is not what they paid nor their bottom dollar.
There's a lot to consider when buying a new vehicle, and by educating yourself on the ins and outs, you can get a good deal. Remember, you don't need to use the finance person at the local dealership to make a purchase. You can and should get preapproved before you step foot on the lot, as it puts you in the "driver's seat" on this major investment.
