There are a lot of financial institutions that are eager to lend money to car buyers, thus you have several options available. Securing the best finance package on your next auto loan requires some effort on your part. Several factors contribute to the type of financing you receive. Here are some tips that will improve your chances of getting the best financing.
Fix Credit Problems Before Obtaining a New or Used Car Loan
Although financial institutions are willing and ready to lend money for auto loans, they are a little reluctant to lend money to high risk applications. High risk applicants consist of individuals with major credit problems. Skipping several payments to creditors and paying bills late have a negative effect on your credit report.
Lenders have to be confident in your ability to repay loans. You are able to obtain an auto loan with bad credit, but expect to pay a higher percentage. To receive a good finance package, resolve credit issues and establish a good payment history with current creditors.
Finance Auto Loan with a Past or Present Creditor
Financing your new car with an existing lender is ideal because you have already established a relationship. Lenders are eager to maintain relationships with past and current creditors. Moreover, if you had a good payment history and maintained a good credit standing with a past lender, they may negotiate a low interest rate and terms.
Purchase a New Car with a Down Payment
Having a down payment is another way to negotiate a great financing package. Down payments can be as little as $1000. However, if you are hoping to snag an advertised low interest rate, and you prefer a low monthly payment, having a down payment of at least 20% is recommended.
Compare Auto Loan Lenders
While some car buyers obtain dealer financing without shopping around, savvy car buyers hoping to get the best financing package should compare rates and fees from at least three lenders. Getting a loan through an auto loan broker is your best alternative.
Instead of submitting a quote request to several individual lenders, request a quote through a broker. Brokers work with various lenders. After reviewing your information, the broker will email you with multiple offers from different lenders. They do all the work. Your job involves reviewing the quotes, and picking the lender that offers the best financing.
Here are our Recommended Auto Finance Companies Online.
Carrie Reeder is the owner of ABC Loan Guide , an informational website about various types of loans.