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
Click to comment

Leave a Reply

Your email address will not be published.

Recent Posts

Business3 days ago

Why Is Quantity Surveying Essential in Construction Industry

Quantity surveying is an essential part of the Australian construction industry. It is the process of calculating and estimating the...

Home Improvement5 days ago

How to Maintain Upholstered Furniture

No matter if you have pets or kids, maintaining your upholstered furniture is quite a challenge. Even though vacuuming it...

Business1 week ago

How Do I Find a Good Bubble.io Developer?

Finding a good bubble developer to help build your app or digital product can seem challenging. How can you choose...

Home Improvement2 weeks ago

When is a right time for home repairs?

Summer is a popular time for a renovation around the globe. While it is true that bright days and warm...

Top Alteryx Competitors Top Alteryx Competitors
Tech4 weeks ago

Top 15 Alteryx Competitors

The world has seen a tremendous rise in startups and new incorporations in the business world. Companies have great potential...

Lifestyle1 month ago

Latest Wedding Trends for 2023

If you’re planning on getting married this year, chances are you’re probably overwhelmed and confused when it comes to wedding...

Lifestyle1 month ago

Tips To Make The Most Of Your City Break In London!

London is one of the best cities in the world, known for its quintessentially British culture, great nightlife, fantastic museums...

General1 month ago

The Ultimate Guide To Packing For A Trip To London

London is one of the best cities in the world, known for it’s rich history, quintessentially British culture, the best...

Tech2 months ago

Top 15 Web Development IDEs

The web development field has seen sustainable growth throughout the years. As technology is advancing, so is the web development...

devops devops
Tech2 months ago

12 Key DevOps Programming Languages to Still Popular in 2022

“DevOps is not a goal, but a never-ending process of continual improvement.” – Jez Humble Delivering the finest of services...

Entertainment2 months ago

Festival Fashion Style Tips For 2022

Summer is well and truly here and with that comes the festival season! From the biggest stars performing on stage...

Green & Energy2 months ago

4 Tips For Making Your Wardrobe More Sustainable

Everyone is trying to make more of an effort to make their wardrobe more sustainable, but often are unsure where...

General3 months ago

7 tips on how to organize a budget-friendly move

If you are planning a move any time soon, you might be worried about all the expenses that wait for...

Metal Roof Colors Metal Roof Colors
Home Improvement3 months ago

Metal Roof Colors: How to Select the Best Color for a New Roof

Choosing the right type of material for your roof is enough of a hassle already that the question of choosing...

Health3 months ago

Simple Ways To Feel More Confident At The Gym

If you are new to the gym, or you haven’t been in a while, sometimes you might not feel completely...

Categories

Archives

Trending