Comparing Auto Lenders Online
Auto lenders each offer unique financing packages. Even if rates
are the same for auto loans, differences in terms and
restrictions can help you decided between lenders. While you
compare interest rates, also look at the fine print to be sure
you can buy a car where and when you want.
Ask About APR
Interest rate cost is a huge factor to look at when comparing
auto loans. While initial rates can lure you in, be sure to
factor in the closing costs and fees. The annual percentage rate
(APR) includes the entire cost of the loan. Comparing this
number will help you find the lowest costing loan.
Just be sure that you are also comparing the same type of loan.
The shorter the loan, the lower the rates. Including a down
payment can also improve your rates since it will improve your
credit standing.
Budget Your Monthly Payment
Your monthly payment should also be considered when shopping for
a car loan. A longer term loan can reduce your monthly payment,
even with higher rates. Also, budget the costs of insurance and
maintenance for your vehicle.
Lower payments are appealing, but a shorter term loan can save
you hundreds, even thousands in interest costs. Take a car loan
for $25,000 at 6%. Interest costs tally at $5,677.64 for a seven
year loan, but only $3,999.20 for a five year loan. That's a
savings of $1,678.44.
Look For Flexibility In Paying Sellers
Who do you want to purchase your vehicle from - a dealership or
a person? Will it be a new or used car? Many lenders want to
know your answers to these questions. Some financing offers
limit who you can buy from. Others offer a blank check to sign
over to whoever you choose.
Before you apply for a loan, make sure you know what type of car
you plan to buy. If you are unsure, keep your options open by
finding a flexible car loan. While you may find lower rates for
purchasing from a dealership, you may also miss out on a deal in
the classifieds.
No matter what type of auto lender you pick, apply early for
pre-approval. Not only will you find out how much you qualify
for, but you can also close quicker on a deal.