Because education is the key to getting the best deal when financing a car, Capital One Auto Finance offers prospective car buyers the following helpful tips:
Set a realistic budget. Choose a vehicle that won’t overextend you financially. A general rule of thumb is that no more than 15 percent to 20 percent of your total monthly budget should go toward all your car-related expenses.
Verify your credit record. Order a copy of your credit report to ensure it’s accurate and in good shape. Correct any errors before applying for a loan.
Comparison shop for loans. Check out credit unions, banks and online lenders to see what rates are available in the market, so that you know a competitive rate when you see one. Visit Web sites such as www.bankrate.com and www.capitaloneautofinance.com.
Arrive with financing in your pocket. Having approved, no-obligation financing in hand gives you a competitive advantage when you go to buy, giving you the power of a cash buyer. If the dealer offers a better loan rate, you can take it with no penalty.
Approach your purchase as three transactions. It’s best to treat each part of the purchase separately: 1) financing; 2) trade-in; and 3) vehicle purchase. This will simplify the process and maximize your negotiating opportunities.
Match length of loan to expected length of ownership. Select your loan term based on how long you plan to own the vehicle. Buyers who take out longer-term loans can find themselves “upside down” on their loan (owing more money on the car than it’s worth in trade).
Review your financing terms carefully. Make sure you know your interest rate, monthly payment, amount you are financing, the length of your loan and your trade-in value.
“If car buyers would spend just a fraction of the time researching their auto loan as they do the latest features on their new car, they’d be surprised at how much money they could save,” said Reed of Capital One. Courtesy of ARA Content