Connect with us


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

Home Improvement3 months ago

How To Add More Value To Your Home

If you have some spare cash in the bank, it is likely you would like to spend it on your...

Lifestyle3 months ago

What is a Deep Plane Facelift

Cosmetic surgery is a choice that needs a lot of research and when it comes to thinking about a facelift...

Entrepreneur3 months ago

Unveiling the Demand for Digital Marketing Courses: A Comprehensive Analysis

In recent years, the realm of marketing has undergone a seismic shift propelled by the digital revolution. As businesses increasingly...

Home Improvement3 months ago

What Does an Effective Wardrobe Spring Clean Entail?

Spring is upon us which means one thing and one thing only. It is time for the annual purge of...

Business5 months ago

Your Basic Guide To Creating A Unique Investment Blog

Starting your own blog is great and once you get the ball rolling, it can be a good passive income...

Business5 months ago

3 Low-Risk Ways To Get Your New Business Started

Once you’ve got an initial business idea and believe that it will be a success, there are some basic things...

Lifestyle5 months ago

Conquering the Co-free Zone: Tips for Thriving as a Remote Worker

Adjusting to an office environment can come with its downfalls in the sense that it might be a shock to...

General6 months ago

3 Ways To Take Control Of Your Finances Starting Now

If your finances have taken over and are bringing stress to your life, we understand just how overwhelming it can...

Travel8 months ago

Best Places To Visit In The North Of England

If you live in England, you will know there are many different places to visit for the weekend. There are...

General8 months ago

Green Home Improvement Ideas

In a world where environmental concerns are growing, the concept of “green” has gone beyond a trendy catchphrase and is...

Lifestyle8 months ago

How to Host an Unforgettable House-Warming!

The time has finally come. You have moved into your dream pad, and are officially adulting in your very own...

Autos8 months ago

A Guide to Parking Lot Striping

The journey to a well-striped parking lot begins with the right paint. In this brief guide, we’ll unravel the mystery...

Business11 months ago

Business Tips For Protecting Your Finances During A Recession

In 2023, taking the necessary steps to protect your finances for your business is now more important than ever. The...

Lifestyle12 months ago

Tips For Cleaning Your Trainers

If you’re into your trainers and streetwear, you’re likely to be very conscious of keeping them looking their best! So,...

Marketing1 year ago

Branding Trends For Start-Ups in 2023

Branding is incredibly important as it impacts how your business reaches and connects with its target market. If you’re branding...