Tips To Keep In Mind When Applying For Auto Loans For The First Time

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Creating A Great Financial Plan

When it comes to taking care of your home and family, a huge priority should be taking care of your money. A few years back, we found ourselves really struggling to make ends meet, and I knew that I had to do something in order to make things work. I started cutting back a little at a time, and I was able to find some extra money in the budget to start saving. This blog is all about creating an excellent financial plan and making things work with what you have. I know that these tips helped me, and I am confident they can make a difference for your family.


Tips To Keep In Mind When Applying For Auto Loans For The First Time

8 February 2022
 Categories: Finance & Money, Blog

Are you a younger person who is about to buy their own car without parental support for the first time? Maybe you are an older adult but you have previously purchased old beaters with cash but now are looking to buy a newer car? Either way, you might be contacting local dealers or financial institutions about their options for auto loans. If you want to get a good deal and keep your interest on the loan down, here are some tips to keep in mind.

Check Your Credit Reports and Max Your Score Before You Apply

Whether it's an auto dealer or someone like a credit union that is looking into giving you an auto loan, make sure you know what is on your credit report and what your general score might be before you apply. A bad score or a bad mark on your report might cause you to be offered rates that are designed for riskier customers. Clean up your credit and get your score as high as you can before you apply in order to get the best offers when it comes to interest. In fact, most special offers like 0 percent financing that you sometimes see at dealers might only apply to those with a great credit score, so keep this in mind.

A Larger Down Payment and Shorter Term Will Minimize Your Interest

Yes, you need the auto loan because you can't afford to buy the entire car outright. But just because you need some help does not mean you should cover the entire cost of the car with a loan. Maximize how much you pay up front and always opt for a shorter term with a higher monthly payment if you think you can manage it. This will minimize the amount of interest you pay over time and ultimately lower the price you pay to own the car.

Don't Forget About Taxes and Try to Negotiate Dealer Fees or Pay Them in Cash Instead of Lumping Them Into the Loan

It's easy to punch the price of the car into an auto loan calculator and think you know what your monthly payment will be. But the advertised price often does not include the delivery charge to the dealer (or your house) for the car and there may be additional dealer markups or fees or taxes that you have not considered. If you are looking for a way to boost your down payment, always add the extra money from fees and taxes to your down payment so that your monthly cost for the loan will still be what you originally thought. Premier Financial Credit Union can give you more information on auto loans.