Car Loan Information
- Date: 2007-04-03 - Word Count: 630
Share This!
Dealing with a car loan can be quite the headache, but here are some things that everyone needs to know.
First, a car loan is a long-term commitment. Many dealerships are now offering car loans that are 72 months, 78 months or even 84 months long. That's between seven and eight years, a lot longer than the average person intends to keep a new car when they purchase it. Since even the best warranties in the business are generally 60 months (five years) bumper-to-bumper and 10 years for the power train only, chances are that this car is going to need major maintenance and repairs long before the car loan is paid off. This is important in planning your budget around your car payment, so that even if the car has a great warranty, you are saving for those upcoming expenses.
Second, your credit rating will affect you car loan. This seems obvious, but many people have not considered it when they go shopping for a new car. Advertised interest rates of zero percent or cash-back financing are often only available for those with the best credit ratings, so shoppers should not expect a car loan at those rates.
Once you understand that your credit rating is going to affect your car loan rate, it makes sense to get a copy of your credit report or at least know your credit rating before going shopping for a car loan. This allows you to anticipate any issues the financier might have with your credit and gives you the knowledge you need to deal with any objections to your loan application.
Some unscrupulous loan officers might try telling uninformed buyers that their credit is "too bad" for standard financing and offer loans for people with less than perfect credit. Knowing your credit score can help you counter these types of people.
Third, your bank or credit union may be able to offer you a better car loan than the car dealership. Given the length of the commitment to this loan, it makes sense to shop around for the best loan available, but most people walk into a dealership and let them handle the financing. The dealership is not in the business of getting you the best car loan out there. That's your job.
The dealership is interested in getting you a car loan, but they do not care if it is one that is good for your financial future or not. So, it is important to shop around yourself for a car loan and find the best rates. Often, this will be with your bank or credit union where people are familiar with you and your credit, but it might also be with a national lender.
One word of caution: applying for a car loan via several lenders could temporarily lower your credit rating. Any time a person applies for multiple new lines of credit there can be a short term lowering of their credit rating while the system figures out that they did not in fact open up that many new debts.
Finally, the most important thing to be aware of when getting a new car loan is to read all the fine print. Unfortunately, many people believe loan officers when they say that it is a standard for and that they don't need to read it.
While it is a standard form to them and they may not be deliberately misleading you, the reality is that you do not sign car loans every day and some small print which they regard as standard might be important to you. Read every word and then make the right choice.
Dennis runs Car Dealer Check which has independent Car Dealer Reviews written by the car dealerships customers and information on Car Dealer Scams.
First, a car loan is a long-term commitment. Many dealerships are now offering car loans that are 72 months, 78 months or even 84 months long. That's between seven and eight years, a lot longer than the average person intends to keep a new car when they purchase it. Since even the best warranties in the business are generally 60 months (five years) bumper-to-bumper and 10 years for the power train only, chances are that this car is going to need major maintenance and repairs long before the car loan is paid off. This is important in planning your budget around your car payment, so that even if the car has a great warranty, you are saving for those upcoming expenses.
Second, your credit rating will affect you car loan. This seems obvious, but many people have not considered it when they go shopping for a new car. Advertised interest rates of zero percent or cash-back financing are often only available for those with the best credit ratings, so shoppers should not expect a car loan at those rates.
Once you understand that your credit rating is going to affect your car loan rate, it makes sense to get a copy of your credit report or at least know your credit rating before going shopping for a car loan. This allows you to anticipate any issues the financier might have with your credit and gives you the knowledge you need to deal with any objections to your loan application.
Some unscrupulous loan officers might try telling uninformed buyers that their credit is "too bad" for standard financing and offer loans for people with less than perfect credit. Knowing your credit score can help you counter these types of people.
Third, your bank or credit union may be able to offer you a better car loan than the car dealership. Given the length of the commitment to this loan, it makes sense to shop around for the best loan available, but most people walk into a dealership and let them handle the financing. The dealership is not in the business of getting you the best car loan out there. That's your job.
The dealership is interested in getting you a car loan, but they do not care if it is one that is good for your financial future or not. So, it is important to shop around yourself for a car loan and find the best rates. Often, this will be with your bank or credit union where people are familiar with you and your credit, but it might also be with a national lender.
One word of caution: applying for a car loan via several lenders could temporarily lower your credit rating. Any time a person applies for multiple new lines of credit there can be a short term lowering of their credit rating while the system figures out that they did not in fact open up that many new debts.
Finally, the most important thing to be aware of when getting a new car loan is to read all the fine print. Unfortunately, many people believe loan officers when they say that it is a standard for and that they don't need to read it.
While it is a standard form to them and they may not be deliberately misleading you, the reality is that you do not sign car loans every day and some small print which they regard as standard might be important to you. Read every word and then make the right choice.
Dennis runs Car Dealer Check which has independent Car Dealer Reviews written by the car dealerships customers and information on Car Dealer Scams.
Related Tags: car, automobile, buy a car, car loan, new car, car price, car buying tips, car quote, car car dealer
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Improve the Value of Your Truck With a Truck Bed Cover
If you are a truck owner and are looking for a way to increase the value and also protect your inves - An Overview of Emergency Road Services
Anyone that owns a vehicle definitely understands that there are truly countless facets of driving a - Buying From Car and Truck Auctions in Canada
Buying a vehicle from an auction can be a good way to pick up a bargain as long as you know what you - 2011 Green Car Of The Year- Who's In It To Win It!
The Green Car of the Year award is a program designed by Green Car Jouranl to recognize and honor ve - Honda's 2010 Odyssey is Efficient, Practical and Convenient
If you are looking for a minivan that has a seating capacity of up to eight persons and handles almo - Greener Trucks For Delivery Work
Green' is a word you'll hear a lot when it comes to transportation, from bicycles to buses - but you - The Courier and Haute Couture
Some jobs just ooze opportunity to flaunt yourself and show off your latest togs but sadly that's ra - All-New 2011 Toyota Camry
The Toyota Camry has been a continuous leader for years in the family midsize sedan class by being a - The Various Benefits Of Summer Tires
As you probably know , different tires are optimized for different conditions. Not only that, someth - A Couple of Tips on Buying a Used Cars in Toronto
If your old car has finally kicked the bucket and you need to get yourself a new mode of transport t
Most viewed articles in this category:
- How to Remove Window Tint
Applying tinting film to car or household windows may be fun, but removing it can be tricky if yo - Transporting Your Car
If you are relocating to another state or another country for employment or family reasons, you may - Choosing The Right Sticker For The Motorcycle Helmet
When people decide to buy a motorcycle, the dealer will usually throw in a helmet. This is because s - Suzuki's 2007 Xl7, “wave” Grand Vitara Debuts at the 2007 Scias
In the news: American Suzuki Motor Corporation has presented its array of cars and SUVs at the 2007 - Nissan Skyline GTR: A Racer That Is Affordable
If you've ever eyed a Porsche 911 or a Ferrari Testarossa, but thought the price was too steep, the - How To Buy Cheap Cars
There are a number of seized car auctions held in various places every month or at least quarterly. - Federal Agencies Expands Hybrid Fleet
Three federal agencies in Kansas recently added hybrid vehicles to their fleet. The hybrid vehicles - New Cars, New Gadgets Presented at the 2007 Naias
The 2007 North American International Auto Show has become an event of glamour, fashion and technolo - Aura Green Line Added to 3 Federal Fleets in Kansas
Three Kansas City area federal agencies added Monday the new 2007 Saturn Aura Green Line hybrid vehi - Top Vehicles by Autoweek Editors Honored at 2007 Naias
Everybody has favorites. Bill may like Ford cars. Susan may be attracted much by the power of pi