Top 5 Mistakes To Avoid When
Getting Used Car Auto Loans |
By Jim Johnson |
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Doing your homework before buying a used car can save you an
incredible amount of money, especially since cars are one of the
most expensive consumer items anyway. But many are not as well
prepared as they should be when they get used car auto loans. For
some reason, buyers seem to often let their guard down when it comes
time to finance the car that they want, and here is where you can
lose more money than almost anywhere else in the deal. So here are
the top 5 mistakes that you want to avoid when getting used car auto
loans:
Mistake #1. Not knowing what your credit score is -
Before you even begin shopping for your car, get a copy of your
credit report and go over it very carefully. Your credit score will
determine to a very large degree how much interest you will have to
pay on your car loan. Unfortunately, it's common to find errors in
your credit report that do not work in your favor, so keep up to
date on your credit report and get all errors removed immediately to
get your best finance deals.
Mistake #2. Not getting auto
financing in advance - Once you have your credit score and know what
kind of interest rate you can qualify for, shop around and line up
used car auto loan financing before you visit the dealer or go
shopping at all. You may want to visit your local bank that you do
business with, or even your credit union as they tend to offer very
good loan rates to their members. But don't forget using the
internet to get auto loan approval too. Many of the loan sites on
the web are able to give you credit authorization within the same
day so it's quick and easy, and often saves money since you are
dealing directly with the lender. Once you have advance financing in
place you are now in position to bargain with the dealer on
financing instead of just blindly accepting what they offer.
Mistake #3. Allowing the dealer to obscure details of the car deal -
Car dealers often want to mix up the numbers from all segments of
the deal so it becomes confusing and hard to pin down exactly what
kind of deal you are getting. Do not let them separate out the three
distinct parts of most car deals, (1) the actual cost of the car
being bought, (2) the actual amount being allowed for trade-in, and
(3) the details of the finance contract if you decide to finance the
car through them. Don't let them get you focused on your monthly
payment early in the buying process. Keep financing totally separate
until the end and watch everything carefully.
Mistake #4. Not
going over the finance contract carefully before signing - If you
decide to finance through the dealer it's usually the last step in
the process and it's easy to be tired by this point and just want to
get things over. But actually you need to be even more vigilant and
review the loan contract thoroughly to be sure that you are getting
the finance arrangements that you have bargained for and that no
additional items were inserted into the deal that you did not
already approve.
Mistake #5. Going ahead with a financing
deal even when you feel uncomfortable - If you ever start to feel
uncomfortable with any part of the sales or financing part of buying
your car, just walk away right then. Don't let yourself be pressured
into doing anything that you don't feel totally comfortable with.
Many consumers have been hounded into buying a car that they later
regretted because of not heeding this advice.
When getting
used car loans, if you avoid the mistakes listed above you will be
able to go a long way toward making sure that you get the right loan
at the right price. |
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