Despite the economic hardships the auto industry has faced, financing a vehicle is still possible. Once you've researched reviews and valuations, and decided on the vehicle you want to buy, consider these four tips from Experian Automotive:
1. Check Your Credit Score
Knowing where your credit history falls in the range of risk is more important now than ever before. Auto lenders use scoring models to help predict whether or not you could become delinquent on your auto loan payments. An auto lender typically receives a credit score that emphasizes your current and previous vehicle payment history. While they may use different credit scores for potential buyers than traditional lenders do, that simply means you shouldn't focus on the number, but on your level of risk and what in your credit history most influenced that risk. Knowing where your credit history falls in the range of risk can help you anticipate the interest rates you may qualify for and the amount of the down payment you will need to make. Consequently, knowing where you stand may give you the leverage you need to negotiate for better rates. You can get your credit report and score at www.experian.com.
2. Know How Much You Can Afford To Spend On A Down Payment
It's important to know how much you can afford to spend on a down payment before you go to the dealer and ask for the keys. If you are able to offer a solid down payment on a car, you will be in a better position to negotiate the final sale price of the vehicle as well as the terms of your loan. And the lower your credit score, the larger the down payment you may be required to make. Being aware of how much cash you have to put down on a car can empower you to secure an even better deal and it can also help you realize what type of car you can truly afford.
3. Research Loan Options On Your Own
It's a good idea to get pre-qualified for an auto loan before visiting an auto dealer. Knowing what loan options you have may influence the dealer to beat an offer from your bank with a better interest rate and lower monthly payments. Before heading to the dealership, check with your bank or credit union to see what loan rates are available.
4. Request Your Vehicle History Report
If you decide to buy a used car or truck, you should always have a licensed mechanic physically inspect the vehicle. You should also conduct your own inspection of the vehicle's past by requesting a vehicle history report from your dealer or pulling a report yourself at AutoCheck.com. The report will provide you with all reported events for that vehicle (odometer readings, vehicle registrations, title transfers, accident damage, emissions inspections) in addition to any issues with the vehicle's title, any unexpected odometer readings, whether the vehicle was ever a rental or used as a service vehicle, and your AutoCheck score. This score is a tool that enables you to understand a vehicle's past quickly and easily, compare it to other vehicles, and lower the risk of buying a vehicle with undetected problems.
Buying a car is an exciting time in everyone's life, so before you rush out to the dealership, make sure you are properly prepared to get the most bang for your buck. Educating yourself on your financial standing as well as the current auto loan market and the history of the car you want to buy will help you drive off the lot with the knowledge that you made a sound investment.