With recovering economy, many of us will be shopping for a new car in 2012. Finding the right car and finding a way to finance it can be a stressful experience. With so many options out there it’s hard to know what is right for you. Dealers also use a complicated jargon when trying to sell you a car. Sometimes, you end up paying a lot more than you thought. Unfortunately, financing is one area where dealers might use all kinds of tricks to make you think you are getting a better deal than you are.
If you are a first-time car buyer, you might think you must accept the financing terms your dealer offers you. In some situations, dealership financing could be your best choice. Especially, if you qualify for a special 0% offer or if you don’t have a credit history. Otherwise, you need to cover all your options.
Get Your Credit Report
First, get your free annual credit reports from all three credit bureaus (Experian, Equifax and TransUnion.) Some states have laws that allow additional free yearly credit reports. These states include Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, Puerto Rico, and Vermont. Make sure you take advantage of this.
Both the dealer and your auto insurance company will examine your credit reports. To get the best deal, you want to make sure the reports are accurate and that there are no outstanding problems. In addition, keeping track of your credit history is a simple credit protection. You don’t want to be one of the thousands of Americans that are victims of identity theft each year.
If you are in doubt about your history and score, you should get reports with credit score. Those reports you must pay for. If your score is below 700 it might be difficult to get a loan at a really low APR.
Find the Right Auto Loan
When you know your numbers, shop and compare auto loan rates from various sources. There a many resources on internet, check them out. Talk with your bank as well. You will probably find that you receive the best offers from an online auto lender or a credit union.
It is also important to remember that unless you are paying cash, always work out your car loan first, then choose your car.
You should also make sure the loan is approved before you drive away with any car.