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Publish Date - January 04, 2022

Author: Arthur Brown

Categories:   Tips & Insights For Car Buying    Auto Loans & Financing   

6 Things To Know About Auto Financing That Will Enable You To Get A New Car Faster

Buying a new car is a huge step and a great investment. You need to consider several aspects before making this investment, especially when it comes to financial management. Today, you can find several auto financing and car loan options that can help you in getting yourself a car. The clauses and terms attached with every car loan will determine how quickly it is approved, which will ultimately impact how fast you can buy a car. Here are 6 things you need to know about auto financing to get a new car.

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Buying a new car is a huge step and a great investment. You need to consider several aspects before making this investment, especially when it comes to financial management. Today, you can find several auto financing and car loan options that can help you in getting yourself a car. The clauses and terms attached with every car loan will determine how quickly it is approved, which will ultimately impact how fast you can buy a car. Here are 6 things you need to know about auto financing to get a new car.

1. Apply at the Right Time

The time and season during which you apply for auto finance matters a lot. Ideally, the application process should take no longer than 14 days as it can keep your credit score intact. This 2-week application period can also accelerate your loan activation process. When you shop around and ask for several quotes, this 2-week window will be unified into a single process, thereby avoiding major blows to your credit score. If you are using your credit card to shop, do not swipe it anywhere for a while, especially during these 14 days to avoid clashing the transaction with your auto finance process.

2. Consider the Overall Cost

When you are taking out a loan, you need to think about the interest rate and the extra costs involved. Buying a car is a huge investment, and you must prepare a budget and stick to it. Getting a loan with a higher interest rate can throw you off and affect your budget. Which factors will impact your monthly payments and installments? Will you be able to pay EMIs for a few years? Do not forget other hidden costs like sales tax and dealer fees that can impact the overall budget and costs. Take some time to calculate the overall costs and talk to your dealer to determine whether or not the costs fit in your budget.

3. Keep Your Credit Score Intact

As mentioned, your credit score plays an important part in getting loans approved. Before improving your credit score, you should first know what it is and the threshold you belong to. Whether it’s auto financing or loans for developments, you should always keep your credit score high to get them approved at the earliest. Even if your score is low, some lenders still offer loans but at a higher interest rate, which can result in a higher overall cost. In turn, you end up paying more than your budget. You can easily check your credit score online and take the necessary steps to improve it.

4. Try to Get a Pre-approval Offer

When getting a car dealership, show a pre-approved offer to the dealer to sign the contract with a firm handshake. Whether you are getting a loan from a private lender or a bank, having a pre-approved offer can speed things up. It is easier to get a pre-approval offer if your documents are in place. Make sure that they are well-documented, signed, and complete before you submit them to the concerned authority. You can also get more leverage on your side, which can be a huge financial advantage. You can easily negotiate with the dealer or ask for additional features as a bonus.

5. Read the Terms and Tenure Carefully

Many people often ignore reading the terms and tenure of a loan. Since they can affect your EMIs and influence other loan factors, go through all the policies with scrutiny. Pay specific attention to the repayment clauses as they will impact the amount you repay in installments within a specific time frame. If the repayment tenure doesn’t align with your budget and timeline, pick a lender who can offer the minimum loan repayment tenure. With this initial homework and research, you can avoid spending a lot of money in the long run.

6. Shop Around

Needless to say, you need to shop around and look for multiple lenders before finalizing one. Along with a low-interest rate, you also need a lender who can quickly approve the loan to accelerate the process. Even if you find extremely minor differences in the interest rates of several vendors, it can majorly impact the overall cost. Contact local vendors and get as many quotes as you can. To narrow down the options, consider the ease of the process, interest rate percentages, and the timeline.

With these tips in mind, you can streamline your loan approval process and get the best deal. The sooner your loan is approved, the faster you can buy your car. Take enough time to research to save money and to get the approval process done within a week or two.