Here’s How You Can Get a Great Deal on Your Auto Loan

While the car loan application process may seem daunting to first-time car buyers, it’s really quite straight-forward. Read our 10-step guide to make sure that you’re getting the best deal.

Credit History

Check your credit report and ensure that it’s accurate. Improve your score if possible before applying for a loan to get the best terms.

Separate the Financing

Don’t get your loan from the dealer. Get quotes from banks, credit unions, respected online lenders, and maybe even your auto insurance company. Getting preapproved is ideal.

Two-Week Window

Your credit score takes a hit every time you inquire about a loan. So, limit your car loan shopping to a two-week window so that all your inquiries only register as one inquiry.

Total Amount

Don’t focus on low monthly payments. You could end up with a long term loan and paying too much interest. Instead, focus on the total amount you can afford.

Rates

Lenders won’t be offering you the best rates. Always assume that you can get a better rate. Let them know if you’ve received better offers or will be shopping around. And let them beat the best offer you find.

Tools

Use online tools to calculate which deal is better, especially between super-low dealer financing or cash rebates. Usually, cash tends to be better.

Fine Print

Sift through the loan paperwork very carefully. Don’t sign unless you understand everything. Take it home if you need to. Walkout if the dealer doesn’t let you study it or has added clauses that you don’t agree with. Never accept any oral promises the dealer or lender makes because they can easily renege on those.

Check the Payments

Ensure that the monthly payments match your calculations exactly. If they don’t, your loan terms may be different than the ones you agreed to.

Conditional Financing

Never accept contingent or conditional financing. Otherwise, they can change the terms later, and you’ll be stuck paying more.

Investigate

Check the state AG’s office, the office of consumer affairs, better business bureau, and any government agencies that regulate lenders to investigate who you’re dealing with. Also, search online and see what customers say about them.