Car Financing and Loans

Car financing is an important step in the car buying process. Often times car buyers do not research their finance options and opt with car dealership financing. This ends up costing them hundreds, even thousands of dollars over the life of the loan. Car dealerships love to advertise great finance rates, but these offers merely lure you to the dealership where you'll find they offer uncompetitive rates. The great rates they advertise on TV have many restrictions and are reserved for consumers with great credit scores.

Credit Score

Your credit score is the most important factor when you apply for loans. Lenders look at your score to determine your credit worthiness, helping them decide how much to give you and at what interest rate. It is important to order a copy of your credit score from all three credit bureaus before you apply for car loans. Discrepancies in your credit report can cost you, so ensure that your credit report is accurate.

Your MyFico Score is the score used by lenders, hence the most valuable to know. Don't fall for the many credit report scams online. The sites offering free credit reports often times don't even show you your credit score.

Car Loans

We've already partially discussed why you should stay away from car dealership financing. What you might not know is that a car dealership often times sells you a car loan from a local bank, and adds percentage points on top of the banks offer which is straight profit for the dealership. Car dealerships are not required by law to reveal this practice either!

We've already partially discussed why you should stay away from car dealership financing. What you might not know is that a car dealership often times sells you a car loan from a local bank, and adds percentage points on top of the banks offer which is straight profit for the dealership. Car dealerships are not required by law to reveal this practice either! As with many things, it pays to shop around. Check Bankrate.com to get current car loan rates in your area, then check with your existing banking institution to see what kind of rate they will offer you.

 

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