Vehicle Loan Tips for First-time Car Buyers

transportation and ownership concept - customer and salesman with car key outside

In today’s world, you need a car to pretty much get anywhere. Even traveling a few hundred miles is more affordable than taking a plane. However, not all of us can afford a brand new car. Next to a home, a car is one of the biggest expenses that you’ll incur in your life. If you commute to work or if you need a car to complete your daily tasks, the expense isn’t only necessary – it is a matter of your livelihood. But after you set your eyes on the car of your dreams, you need to learn how to navigate the tricky process of getting a loan. One of the most important tips for new car buyers is that the more knowledgeable you are about the loan process, the more agreeable your loan will be. Here are some vehicle loan tips for first-time car buyers.

1.       Make sure that your credit is in good standing. Many people assume that their credit is in order, but when they go to check their report, there is something dragging the score down. So, make sure that your score is high enough to get approved by a lender. The last thing you want is a low credit score to keep you from getting a car loan, or worse, a high interest rate. If you have a particularly bad credit, you may want to go with a company, like eTitleLoan, that doesn’t require a credit check.

2.       Know what the current standard interest rates are. When you apply for a car loan, you want to know what the current interests rates are, because they may be too high. In that case, you may want to opt for leasing a vehicle instead of buying one. However, if the interest rates are low, it is often easier to work with a lender and to secure a loan.

3.       Have a co-signer. A lender wants to be assured that the loan will be repaid in a timely manner. If they don’t quite trust that you will pay back the loan, the lender will almost certainly deny you a loan. However, if you have a co-signer with a reputable history and credit score, it will make the lender a lot more confident. So, make sure that you have someone that can provide their signature – someone that you can trust and who trusts you.

4.       Increase your down payment. Any lender that promises you a loan without a down payment is trying to bilk you with high interest rates. So, make sure that you put down at least 20% of the car’s value when making a down payment. This will ensure that your interest rates stay manageable. If a lender still pushes you not to make a down payment, you may want to go with another lender – one that you can trust.

5.       Get pre-approved for a loan before you start looking for a vehicle. If you don’t get pre-approved first, you won’t know what your exact price range is. This can cause you to waste precious time and energy. So, make sure to get your priorities in order and start looking for a lender before you start looking for the car.

Leave a Reply