Connect with us

Autos

4 Tips for Shopping for an Auto Loan

1193021_dark_dollar_2Getting a new car is one of the more exciting purchases we make; but, they are not cheap, and most of us need to secure some sort of financing to get those keys in hand. When considering a car loan, there are many factors to take into account to ensure you get the most favorable rate and that you are not over-extending yourself. Here are some tips for financing a vehicle.

Make Sure Your Credit Report is in Order

This first tip is vital when seeking any type of loan; your credit score is that all-important number that gives lenders a picture of your relationship with money. You want every point you can get and applying for a loan under the assumption that everything in your credit report is correct and you have whatever score you have, can be a costly mistake. Even something like incorrect reporting of credit limits can ding your score by inaccurately reflecting your debt to available credit ratio.

Avoid Long-Term Loans

When getting a loan, it is easy to just focus on the immediate effects—low monthly payments are attractive because we are thinking in terms of monthly income, and stretching out a car loan over six or seven years minimizes our monthly financial obligation. But, you want to think of the big picture. Cars depreciate in value dramatically once you drive them off the lot and any warranty will likely expire in three or four years; you do not want to risk being stuck paying off a loan on a car that you no longer want or may end up getting rid of for one reason or another.

Look to Get Outside Financing

Getting a loan from a dealership is certainly not your only option, and you may be better off getting financing from an outside source such as a bank , credit union or peer to peer lending source. First, this reduces the risk of getting seduced by a car you really cannot afford ,and taking out a bigger loan at the dealership than you should. Also, financing secured beforehand essentially makes you a ‘’cash buyer’’ and may give you more leverage in the negotiating process. No matter where you end up getting your loan, it is important to figure out a realistic budget—many financial experts recommend that vehicle expenses, including gasoline, should not account for more than 20 percent of your net income, which is what you are left with after taxes.

Inquire about Penalties

Financial circumstances can change, and if you find yourself flush with cash and wanting to pay off your car loan early, make sure that it is not going to cost you. Look for lenders who will not charge a pre-payment penalty if you settle your bill sooner than anticipated, either with one lump sum payment or making extra payments. Read loan documentation carefully as penalties may not be labeled exactly with that wording.
Kelli Cooper is a freelance writer who covers all things auto; if you are in need of auto insurance in Canada, visit Kanetix for more information, such as quote comparison.
Photo Credit

Continue Reading

Recent Posts

General2 weeks ago

Invigorating Your Wheels: Mastering The Art Of Car Painting Techniques

Have you ever marvelled at the glossy, vibrant colours glossing over cars as they zip past you on a sunny...

Home Improvement2 weeks ago

The Ultimate Guide: Preparing For Packers And Movers

Moving homes is a significant event in everyone’s life that can evoke a myriad of emotions. Excitement, optimism, sadness, and...

Science2 weeks ago

The Impact Of Polycarbonate On Eco-Friendly Production: An Exploration Of Sustainability In Design

Have you ever wondered about the role of modern materials in shifting our society toward more sustainable and ecological ways...

Law2 months ago

Understanding the Eligibility Criteria for Indefinite Leave to Remain

A migrant to the UK has the right to make a permanent move to the country without any immigration restrictions...

Home Improvement3 months ago

Mastering The Maintenance: Breaking Down The Basics Of Your Ducted Heating And Cooling System

Welcome, fellow home enthusiasts! Ever find yourself lost in the labyrinth of your ducted heating and cooling system? Have you...

Business3 months ago

The Invisible Hands: Unveiling How Food Distributors Influence the Quality of Our Foods

Ever found yourself wondering why the tomatoes in your salad taste particularly fresh or why your preferred brand of coffee...

Marketing3 months ago

Webflow CMS: A Comprehensive Guide

Webflow is a powerful tool that allows you to create and manage dynamic websites without needing to code. It’s a...

Business3 months ago

The Three Most Important Benefits You Should Offer To Your Employees

Offering your employees a range of benefits on top of regular salary increases will really help to show that you...

Business4 months ago

Business Tips For Protecting Your Finances During A Recession

In 2024, taking the necessary steps to protect your finances for your business is now more important than ever. The...

Green & Energy4 months ago

Air Conditioning Installation: What You Need to Know

When it comes to getting an air conditioning unit installed, can significantly improve your comfort and home environment, especially during...

Marketing4 months ago

Marketing Tips For A Gym Wear Brand

When starting a gym wear brand, there are a few things you need to do and one of them is...

General5 months ago

Social Media Marketing: What Are All The Types?

Social media marketing is a tool that is a must-have in today’s digital age. it’s very rare that businesses can...

Business5 months ago

How To Become A Property Developer

There are several reasons why an individual will want to become a property developer. One of the main reasons for...

Business6 months ago

Remote Delivery Innovations: Case Studies from Leading E-commerce Brands

People have gone through much change in the past few years when it comes to online shopping. Nowadays, when delivery...

Business6 months ago

Why are Brits turning to online-only banks?

For years, large, conventional banks held all the aces when it comes to citizens’ finances in the UK. HSBC, Lloyds...

Categories

Archives

Trending