Choosing a car straight off the forecourt is thrilling and in the excitement, you can start convincing yourself you can afford what you thought you couldn’t five minutes before you arrived.
Before you get carried away on the most expensive shop you might ever do in your life, take some time to prepare for finding the very best deals you can for your car finance.
Get Familiar with Your Credit Rating
Using a loan to buy your car seems to be the perfect option to get your four-wheeled dream parked in your garage.
However, to get the best deal, you need to know what your credit score is. Many people think that credit scores don’t have much to do with a car loan.
After all, you can qualify for a car loan even if your credit report reveals a bad story about your financial behavior.
However, many lenders provide loans because they know it is easy to repossess a car in the event of a default.
Moreover, getting a car loan is one thing and getting an expensive car loan is a different thing completely. With a bad credit score, you are going to pay ‘a lot more’ to secure an auto loan.
Sometimes, the borrowers are so overwhelmed with the idea of being qualified for a loan they don’t search on for a better deal.
If you know your credit report is shaky and a lender has agreed to offer a loan, why would you continue looking?
Taking the first offer you get accepted for could end more expensive. Give it a few days and you’ll start getting emails and some could be worth taking a closer look at.
It is possible to find dealerships offering new cars at very competitive interest rates which is usually around 1.9% and sometimes as low as 0%.
What they don’t advertise is that these rates are applicable to buyers with a stellar credit score.
You may be able to qualify for a reasonably good interest rate with your credit scores hovering around 700s, but you will still miss the chance to enjoy the best promotions.
Therefore, knowing your credit report means you can take steps to improve it before applying for a car loan to get a better deal.
Just by completing a credit application, you will receive a quote from different lenders with the maximum amount you can spend to buy you a new car.
With many comparison sites available, you can contact multiple lenders and compare their deals side-by-side to make a decision.
Asking for quotes doesn’t mean you are under any obligation to buy from them but you will be in a better informed to know what to expect when meeting other lenders or contacting a dealership for an auto loan.
Whether you are finding your car loan online or using a broker through the dealership, knowledge is power.
If you know your credit score is good, you can use it to your advantage. Once you register to a couple of comparison sites, they’ll be seeking you out with competitive deals and offers.
Hold your nerve even if your score is less than perfect. If you’ve done your research and know what you should be paying, you recognize the really good deals.