For many people, buying a new car is one of the most exciting purchases they make, while how to finance that vehicle can be one of their most important decisions. Since Americans tend to hold on to their cars for about six years
, it’s important to not only to choose the right vehicle at the right place, but to also get a loan that’s affordable. Before you buy, understand your options and the simple ways to make that monthly car payment way more budget friendly.
Know your Credit History
One of the biggest factors that lenders look at when reviewing a loan application is your credit history. For that reason, it’s important to review—and if needed correct— your personal credit report before applying for a loan. You can access your credit report from AnnualCreditReport.com
and make sure to get a copy from each of the three major reporting agencies (Equifax, Experian and TransUnion) because you don’t know which one a lender will look at.
Shop for a Loan
Many consumers wait until they’re at the car dealer to ask about financing, though another option is to check with your financial institution first. That way, you can get a sense of how much car you can afford before you start looking. Plus, you’ll understand the financing options and can compare them to the dealer financing
, which is when you enter into an agreement with a lender that the dealer has arranged for you.
Another thing to keep in mind is that though dealers can sometimes offer more competitive financing, a lower rate isn’t always the best option.
For example, sometimes it’s better to opt for the dealer rebates instead of financing (often you have to choose one or the other) and combine that with another lender’s financing.
Secure a Loan for Your Personal Needs
Low rates, while important when borrowing money, aren’t always the only thing to consider when shopping for a loan. For many people, another factor is how affordable the monthly payments are. For instance, if you like the idea a conventional loan, but are intrigued by the lower cost of leasing, you may want to consider a hybrid solution, like Greater Nevada’s Payment Saver auto loan
In some cases, getting a loan is more about establishing or re-establishing credit, and your financial institution is the perfect place to start, because there may be solutions you didn’t think of. For example, Greater Nevada has loans for those getting their credit score back on track
, and a First Time Buyer Program
for those with no credit history.
There’s not a one loan fits all solution. Doing your research and understanding your options up front can help you make the right purchase, while getting the best financing for your personal situation.