back to articles | August 10, 2019 | John South
Categories:   Auto Loans & Financing
4 Key Ideas for Getting an Auto Loan
Shopping for a new car is mostly a pain – it is from my perspective anyway and over time, there are things that can be shared to make this process a lot easier. To start with, getting pre-approved is one of the best things you can do. The “Why” is very obvious if you have ever spent 3 hours in the “Penalty Box” at a car dealership! It’s all meant to wear you down and keep you invested in the “buying” process.
The loan process can seem like a daunting and difficult process but it is not. I’ll share a few things that can make this easy. Here are a few tips for getting a car loan the easy way.
- Know How Much You Want to Spend
If you already know what you have to spend, great! So many car buyers really don’t know until they get on the dealers’ lot. If you don’t have a budget set, list your monthly income after taxes and subtract all your monthly expenses. If you are trying to save, don’t forget to put that on the list as to how much you want to put back. Consider that if you end up with being able to afford $600 per month, that is could take away from your monthly savings. If you have annual expenses that come in once a year, just divide the total expense by 12 and add to your monthly worksheet. One more thing to consider – You will have some “new car costs” from your purchase so don’t forget to add insurance, registration, car maintenance and possible repairs to your list. Keep working with the numbers until they come in at a range that will make your car easy to afford.
2. What Can you Afford
If you have done your due diligence, you are now close to understanding and deciding on a reasonable monthly car payment that will fit your budget. Now, with a payment amount in mind it is smart to utilize a car payment calculator to get an idea of a total dollar amount you can establish for your car purchase. You can use auto loan calculators to get an idea of interest rates, monthly payments and total costs that you are able to afford. You can choose if you want a 36, 48 or 60 month loan and it calculates all the above for your convenience. Knowing this puts you in a much better position to work with the dealership and can help keep you out of the lengthy negotiations with the finance manager.
3. Get Pre-Approved
You can now take control of the auto financing process by getting preapproved for your auto loan before you ever step on the dealers’ lot. Getting multiple loan quotes is an outstanding way to be in charge of your loan process. Go online and see who offers multiple loan quotes and apply. This is the best way to get the best interest rates, best terms and be in control of the loan amount that you can afford. Since most loan offers online are only good for up to 30 days, make sure you are ready to get out and find the auto you want. Know that some offers have stipulations attached to them but if you use a lending platform, you can get real auto loan offers in real time and they are all good at franchised dealers. The better your credit, the better the offers as the lenders will try to be a competitive as possible to earn your business.
4. Start Shopping
Now the fun part begins – shopping for your new wheels. Make sure you do your homework and do some research to find the autos that will fit your needs the best. Consider things like miles you drive, MPG, color and size of car that you want and any extra features that you are looking for. If you do your research up front, you are going to be in a great position to come out on top when you finalize all the details. By using these steps, you’ll be in a position to not only find the best auto financing, but the best value auto. Be prepared. Be smart. Success!