own a new car, even if you don’t have $20,000
to spend? Absolutely. Auto loans make car ownership an
affordable reality, and virtually anyone can arrange for
financing. If you have sufficient income and a good credit
rating, you will be able to choose from a selection of auto
loans.
Step 1
Choose your wheels before arranging your loan. The bank or
finance company will want to know what you’re buying, and how
much you’ll need to borrow. Shop around by checking automotive
websites and visiting local car dealers. Once you know exactly
what you want to buy, you can negotiate a price with the
seller. With price in hand, you’ll find it easier and faster
to secure your financing.
Step 2
Shop around for the best interest rates. There are online
websites like http://www.Bankrate.com that publish surveys and
polls of loan rates across the United States. The rates of
auto loans will fluctuate with the market, and they definitely
differ from lender to lender. Shop around to find the lowest
rate and best lending terms. Checking with local banks, credit
unions and even car dealers can save you money.
Step 3
Purchasing a new car is a costly, and sometimes risky business.
Auto loans involve a lot of money, and you need to prevent any
possibility of getting ripped off. Check with used car values
to see how much your current vehicle is worth. Knowing your
car’s value will help you to get the most money for your
trade-in. Consult a black book or research online to find the
current market value of your vehicle.
Step 4
Determine how much you’re able to spend as your down payment.
Providing cash up front can help you to secure an auto loan, as
it proves to the lender that you’re responsible and willing to
repay. It also decreases the amount of principle and interest
you’ll pay throughout the term of your loan. Some lenders
require a down payment of twenty percent of the vehicle price.
Remember that the value of your current vehicle may be applied
toward your down payment.
Step 5
Once you know the type of car you’re buying, the purchase
price, the available rates and the amount of down payment
you’ll need, it’s time to shop for a lender. Be careful in
this step, as there are many shady lenders who are quick to
hand out cash in exchange for very steep repayment amounts.
Compare interest rates, the loan term (two years, three years,
etc), monthly payment amounts and, of course, how much you’re
able to spend. These factors will all help to determine your
choice of lenders.
Step 6
Don’t panic if you don’t qualify with the first lender you
choose. There are literally endless auto loan options
available to you. Just be sure that you’re not living beyond
your means. You may need to save a little more to come up with
a bigger down payment, or simply choose a less expensive car.
Step 7
It’s easy to create a lousy credit rating, and the poor rating
can hound you for a long time. If your credit rating is
keeping you from securing an auto loan, you can begin working
to rebuild it. Pay your bills on time, and clear up any
outstanding debts. After six months, you’ll be able to reapply
for a new credit rating. If this is not an option, you can
choose to look into bad credit auto loans. Insurance companies
that offer bad credit loans don’t require their customers to
submit their credit histories, so it is possible to secure an
auto loan despite poor credit. However, remember that the
financer will view you as a risk, and you will pay higher
rates.
Auto loans make it possible for virtually anyone to buy a new
car. It’s why you see so many new vehicles on the road today.
If you think you can’t afford the car of your dreams, shop
around. You might be surprised at what you find.
About The Author: James Thomas writes articles for several
popular web sites, including http://sojab.com and
http://cupur.com
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