By educating themselves before shopping and mapping out a game plan, consumers can gain the upper hand when negotiating their vehicle loan. To help put consumers on the road toward a smart financing deal, Capital One Auto Finance offers the following tips:
* Verify your credit rating.
Order a copy of your credit report to ensure it’s accurate and in the best shape possible before applying for a loan. Credit score plays an important role in determining the interest rate you’ll receive. Make sure your lines of credit are in good standing and be sure to correct any errors promptly. You can order a credit report from one of the three major credit reporting bureaus: Equifax, Experian or TransUnion.
* Comparison shop for loans.
Many people know they can get a car loan from the dealer’s finance department -- but it pays to research other options. For example, Internet auto lenders such as Capital One Auto Finance provide a combination of low rates, convenient application process and fast response. Those approved by Capital One Auto Finance receive a no-obligation Blank Check, which they can use like a personal check at the dealership. Whether you choose an online lender, bank or credit union, be sure to comparison shop for interest rates first, so you know you’re getting a competitive rate.
* Arrive with financing in your pocket.
Having approved, no-obligation financing in hand gives you a competitive advantage when you go to buy your car. That’s because you know your interest rate and monthly payment in advance, which gives you an idea of the price range of cars you can afford. This approach also lets you buy with the power and flexibility of a cash buyer.
* Approach your purchase as three separate transactions.
Buying a car usually involves three different transactions and it’s best to treat each of them separately; 1) financing; 2) trade-in; and 3) vehicle purchase. This strategy will help isolate each act, keeping them clear and simple, while maximizing your negotiating opportunities.
* Weigh your purchase incentive options.
Many auto manufacturers will offer a choice between a cash rebate or a discounted financing rate as a purchase incentive, but usually not both. Even if you’re among the minority who qualifies for a 0-percent rate, don’t assume it provides the most savings. Sometimes you’ll come out ahead by applying the rebate to the purchase price and using your own low interest rate loan. Bring a calculator or laptop to the dealer to see which option is best for you.
* 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 to keep their monthly payment low can find themselves “upside down” on their loan -- that is, owing more money on the car than it’s worth in trade when it’s time for a new car.
* Take your time reviewing the contract.
Don’t put pen to paper until you know the following: your interest rate, monthly payment, amount you are financing, the length of your loan and your trade-in value. Also, make sure unwanted after-market “extras” haven’t been added to the deal.
Additional car financing information and resources can be found by visiting the help center at www.capitaloneautofinance.com.
Courtesy of ARA Content
