Wednesday, February 15, 2017, AM | Leave Comment
Whether you are buying your first car or a replacement, you need to enter the financing process with a good understanding of what to expect.
The below four sections outline the most important things to keep in mind:
Financing applications often set off red flags at credit bureaus. Always submit all lender applications within a two week window so that it is obvious that you are just shopping around instead of trying to get multiple loans.
Also, submit copies of important supporting documentation about areas like your employment history and income to move the process along faster.
Banks and dealers, like Milton Ruben Toyota, offer financing options to people who have great, okay, bad and no credit. A 720 or more score and a high down payment of at least 20 percent of the total can get you the best interest, fees and other agreement terms.
Dealers offer manufacturer’s discounts and match competitor prices. You can also typically get discounts if you are a soldier/veteran, student or teacher or if you choose a hybrid car.
If you agree to a longer repayment schedule and smaller payments or make a smaller or no down payment, then a “total vehicle loss” like an accident, theft or trade-in might cause you to need a new loan while still carrying a lot of the debt from the current one.
To prevent negative equity, make larger payments every month or wait to finance until you have a large deposit. Also, invest in Guaranteed Auto Protection insurance that pays the remainder of what you owe after certain events.
Watch out for smaller monthly payment options from both banks and dealers. Small payments extend the length of a loan and increase the amount of interest you pay over time.
Additionally, negotiate waived fees on so-called deals that include paperwork preparation, rate lock and prepayment penalty fees.
Also, never fall for tactics to try to convince you to accept a deal as soon as you receive it. Instead, request that the salesperson lock in the rate for a certain number of days so that you can review the paperwork, compare the deal to other offers and then make a decision.
You must always handle the auto financing process like you would any other type of loan. Look for deals and scams, ask non-general questions, never settle for half-answers and read everything including the fine print so that you can make an informed decision.Facebook.com/doable.finance