There are many ways to haggle for the best fair profit offer on auto financing, more commonly known as car loans. However, most buyers usually make two of the biggest new car financing mistakes possible when searching for car loans. The first is trying to buy a new car without checking online car loan rates. The second is then proceeding to get a car loan without checking whether or not their credit history can support it. The most common automobile financing mistakes are by people who get their car loan at the dealer. Keeping a few pointers in mind can help to avoid making such mistakes.
Rule No. 1: Don’t trade in a new car on which money is still owed.
Without a doubt, refinancing is good way of saving money. What the dealer often proposes is that instead of paying for a new car loan and taking cash out of your savings, you sell out the remaining payments of your old car loan and let the new dealer pay for it. Obviously, this sounds too good to be true.
What happens then is that often those people, after trading in a car they still owed money and getting a new car loan, will find out two months later that the new car dealer has not yet paid off the old car’s loan in ten days as promised. Thus when the bank calls, they are still responsible for making the payment because the old car loan is still in their name. Unscrupulous dealers do this frequently to save themselves money, causing the customer to end up paying more for the trade.
If this sort of arrangement is really what a buyer wants to do, make certain the dealer puts in writing that they’ll pay off the car loan and by what deadline. This is the buyer is better protected against getting ripped off by a dishonest salesman.
Credit Scores and Loan Rates
As everyone knows, credit scores greatly affect any loan rates, including car loan rates. Those who have bad credit generally pay higher auto loan interest rates. Thus in order to get the best end of the bargain it will be important to get a credit report with credit score. This can be done online through several Web sites, such as Equifax, Experian, or TrueCredit. If a score is less than 550, it’s likely that the new car loan will have higher rates unless a bad credit auto loan is obtained. Always paying on time and closing out inactive open accounts can improve credit over time, resulting in improved loan rates.