So you found the car of your dreams but don't know how you are
going to pay for it? Well, there are a few steps involved in financing:
Get Your Credit Report: Before you walk into the dealership and
apply for financing you need to know what your credit record is
like. Too many dealers will trick you into believing your credit
report is less than stellar and will try to slide in a higher
interest rate.
Decide where you will finance: It's convenient to finance through
the dealer but many times you are not getting the best interest
rate.
Consider the following sources:
- Credit Unions: If you belong to one, you can usually get much
lower interest rates. Credit Unions are there to serve you,
not themselves.
- Online Lenders: With lower overhead, online lenders can offer
you better rates than a dealer. You can get great used car financing
or new car financing rates when you compare quotes with other
lenders.
Check the fine print: Make sure you will not be penalized for
paying off the loan early. Also check the minimum collision coverage
required. If you are used to carrying a $1000 deductible and the
lender requires a $500 deductible, you could be in for a surprise
when the bill shows up.
If you decide to go to the dealer to arrange the financing, request
to see the approval letter from the lending institution. Dealers
can mark up the interest rates and earn commission by doing this
little trick.
Before signing: Check the fine print Always keep a calculator
with you and double check everything.
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