Don’t Be A Fool: Take Precautionary Measures to grab the Best Car Deal

April Fool’s Day comes with the common tradition of jokes and pranks. It is common to make a fool out of each other. But when it comes to car buying, you should make sure you do not get fooled on April Fool’s Day. The mistakes you make while you buy your car can cause you to pay for it in the long run. Therefore, it is important that you stay aware of the possible traps and take precautionary steps to avoid car buying disasters. 

Car Buying Tips: Essential Tools to Not Be A Fool

Take note of the common mistakes that you can eliminate while making the purchase. Also, learn which precautionary measures are necessary to ensure a financially beneficial deal. 

1. Mistake: Negotiating on Monthly Payments

Precautionary Measure: Most people tend to think about car payments as the amount that goes out of their pockets every month. However, the moment you talk about financing, make sure you consider the value of the car in its entirety. Always start by negotiating on the price of the car, financing in terms of interest rates and then the trade-in value of your old car, respectively. Avoid the mistake of negotiating by monthly payments as you will end up having no idea about the total cost of the car. Instead, negotiate on the entire value and then focus on lowering your monthly payments. 

2. Mistake: Restricting Car Models

Precautionary Measure: A common mistake while buying a car is to fall in love with a specific make and model. You automatically restrict your options when you are not open to selecting different car models. In the process of a rigid selection, you may miss out on other car models that better suit your needs and requirements. Therefore, when you step into the dealership lot, put aside your emotions and choose a car that matches your needs, has decent reviews and falls in your budget. 

3. Mistake: Delayed Financing 

Precautionary Measure: The actual amount of your car and the total cost of owning the vehicle depends not only on your negotiation skills but also on your financing knowledge and prowess. Do not wait to think about car financing until you enter the dealership lot. Shop around various banks and browse online auto financing companies. Gain knowledge on the current value of the interest rates and the price of the car. The best option is to get a preapproved auto loan that will secure your financing and help you make a faster car buying decision.

Pro Car Buying Tip: Ensure Precaution This April Fool’s Day 

When you set out to purchase your car, always be aware of the deal offered to you. Every car has certain unnecessary extras and you could end up saving up to $200 by eliminating such charges. Also, make sure you research the correct value of your current car, in case you are willing to trade it in for a new one. All in all, if you are focused while negotiating and understand how car financing works, you will not be fooled by the dealer’s tactics. 

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The Pros and Cons of it all: How an Auto Loan Impacts your Credit Score?

A credit score is an important element that assists lenders to check your creditworthiness. A higher credit score displays a faith in your word that you will make payments on time. General questions that arise while auto loan shopping include: What happens when you apply for an auto loan to purchase a car? How does an auto loan change your credit score? Analyze the following points in the light of your current situation and understand how an auto loan will affect your credit score.

Does Applying for an Auto Loan reduce my Credit Score? 

Often car buyers are worried about a drop in their credit score. But, do not worry about the reduction in your score. Learn how an auto loan impacts your score so that you can make an informed decision. 

1. Hard Inquiries & Rate Shopping

 

The moment you apply for an auto loan and the lender requests your credit report, the inquiry is treated as a hard inquiry. Many inquiries from different lenders indicate a potential for degrading the credit score. However, the credit rating company observes the multiple inquiries as a single entry of auto loan shopping as long as the entries are within a limited time period. Timely payments, such as auto-generated payment models, will help you to recover any credit points that you lost because of hard inquiries. 

2. Payment History

The most important element in a credit report is your payment history. Once the lender pulls your credit report, it will indicate your payment behavior. If you have ensured timely payments in the past and continue to walk on the same path in the future, your score will improve. However, losing out on a payment for a long period of time can damage your credit score and also put your car in the risk of repossession. Therefore, it is imperative to maintain your monthly payments as your payment history has the biggest impact on your credit score. 

3. Variety of Credit 

The different types of credit sources that are reflected on your credit report affect the lender’s decision. Also, it has an impact on your credit score. Many credit scoring models look at the number of credit cards you use on a regular basis. An auto loan is a different type of credit source, namely an installment credit wherein you repay the principal and interest amount spread over a few years. Obtaining an auto loan will be an additional variety of loan to your credit mix. And, it will give your credit score a definite boost. 

Applying for an Auto Loan is Good for your Credit Score

 

After analyzing the impact of applying for an auto loan, the positive effects outweigh the negative elements. Make sure you check your credit report for any errors that may unknowingly decrease your credit score. Every year you are eligible to request free copies of your credit report. The decision to apply for an auto loan can help if you are responsible. Remember to have a payment plan because it will serve you as a financial foundation for strengthening your credit score in the long run. 

Are you applying for an auto loan? Do not worry about your bad credit history. Choose a lender who doesn’t shy away from approving bad credit auto loan Texas applicants. Apply with the loan expert to enjoy guaranteed auto loan approval.

Simplifying the Financing Process of buying a Used Car

According to a report by the National Automobile Dealers Association (NADA), 2019 is going to be a good year for new cars as well as used cars. Car buyers will shop for 16.8 million new cars and trucks this year, but it doesn’t mean you should seek a new car only. According to Patrick Manzi, senior economist with NADA, there is a widening gap in monthly payments between used cars and new cars. And, it is one of the primary reasons why young, college students and value-focused car buyers will opt for used cars.

 

Used Car Financing Tips: Simplified Answers for Clear Understanding

If you are planning to buy a used car, your mind may be muddled with several questions: How to buy a used car with bad credit? How does used car financing work? What should be the loan term? Is it possible for a no credit car buyer to get a used car loan? How to get the lowest rates? 

When your goal is to get the best deal on a used car loan, you need to focus on two things: 

A. The Interest Rates on Used Car Loans

A used car loan should not give you nightmares. So, focus on getting low-interest rates. Many car buyers spend time in finding low monthly payments. But it doesn’t matter in the big picture. You can save money only when the interest rates are low. Period. 

1. What is the Current Interest Rate on Used Car Loans? 

If you take a look at the existing interest rates for an excellent credit buyer, a 60-month used car loan will come with an APR of 3.74%. However, when you have a bad credit score or a zero credit history, the interest rate will fluctuate depending on the severity of your credit score and current financial situation. According to a report on The Simple Dollar, if your credit score is between 500 and 589, the interest rate will 15.24% and monthly payments will be around $478 for a $20,000 auto loan with a term of 60 months. 

2. Where to shop for Bad Credit Used Car Loans? 

If you have bad credit, stop worrying. Credit reporting agencies know the importance of rate shopping in your car buying journey. If you apply with many banks, credit unions and online auto financing companies within 45 days of your first application, all the inquiries will be considered as one. So, apply with many lenders and choose one that offers numerous benefits: low interest rates, zero application fee, minimal processing charges, zero pre-payment penalty, manageable loan term, zero down payment facility, etc. 

Compare different loan quotes. If lenders are offering 10% APR or more on used car loans, make a down payment to lower the cost of the auto loan. Also, bring a cosigner to improve the credibility of your loan application. 

B. Your Budget for purchasing a Used Car

According to Experian’s Q2 2018 State of the Automotive Finance Market report, used car loan payment amounts to $378 every month. The average auto loan payment for a new car during the same term was $525. Buying a used car is a better decision. But, to make it a financially sound decision, pay attention to numbers other than monthly payments. 

1. Consider buying a certified pre-owned car from a reputed dealer. Even though it will be costlier than buying from a friend, you will be assured of the quality. 

2. Save money on the insurance by only buying the insurance coverage that you need. 

3. Calculate car registration fees by visiting the local DMV website of your state. It will give you a clear idea of the taxes and fees. 

4. Calculate the average fuel and maintenance expenditure. 

5. Find ways to add to the down payment amount. 

Ascertain the total monthly cost of owning a vehicle via online calculators and compare the number with monthly payments and your income. If the numbers tell you to go for a used car, only then say yes. Remember that thorough understanding of the loan is essential to avoid any surprises later. 

Buying a Used Car is a Smart Decision! 

An average American buys more than 10 cars in his lifetime. And, if you are going to spend 30,000 (plus interest) on every car that you purchase, imagine the total expenditure. By choosing a slightly pre-owned car, you will be able to fulfill your dream of buying a car at affordable prices. Also, by following a few smart tips, you will be able to nab the best financing deal. 

No matter your credit history, your used car loan should be affordable. If you have a bad credit score, seek used car loans from a reputed lender. Remember the more time you spend in choosing the right subprime car lender; the better will be your auto loan terms.

The Numbers Game: Steps to Get Your Auto Financing Right

When you think about buying a car, most of your energy goes into searching for the correct car. While it is critically imperative to look for the right car model, it is more important to understand how you will pay for the vehicle. The numbers game is all about searching for the correct tools that will help you get an idea of your current financial situation. They will also help you to take the right steps in order to make the auto financing process a success.

Numbers that will make your Auto loan a Success Story

1. Budget Ahead

 

Having a clear picture of your financial situation is necessary for buying a car. By calculating your incomes and expenses, you will be able to find out how much money you can direct towards the monthly auto loan payments. Focus on the monthly budget. Consider the monthly income after taxes and deduct every expense that you incur. Annual expenses such as Netflix subscriptions can be divided over 12 months and then subtracted. The remaining amount after savings is the monthly budget that you can comfortably spend on your new car. Remember it will include fuel and maintenance expenses, insurance and the auto loan payments. 

2. Improve Your Credit Score

 

The better your credit score, the more chances you have at scoring a cheaper auto financing program. Solid credit history and a credit score of more than 600 can help you attract low-interest rates and better auto insurance options. In order to improve your credit score, pay off past debt, reduce your debt-to-income ratio to at least 36% and check your credit report for any errors or duplicate entries. Consistent effort on improving your credit score will help you save a lot of money over the term of your auto loan. 

3. Managing Down-Payment

 

A good down payment is a good move to reduce your future burden and become debt-free early. A down payment of 20% or more on the total price of the car will help you to cut down on your overall cost. Also, it will put you in a great position to negotiate for lower interest rates. Save up for a big down payment before you purchase your car. Obtaining a pre-approved auto loan and putting money down are great ways of handling auto financing responsibly.

The Right Way of Financing your Car

 

While purchasing your new car, auto financing will be the key element in deciding your future financial expenses and savings. Make sure you take the time to think about the important tools that will assist you in perfecting your auto financing game. For instance, a reduction in the loan origination fee is possible if you initiate automatic monthly payments. Therefore, always be aware of your current situation and work towards building a strong financial foundation for you. 

Ensure a successful car buying process by working with the bad credit guaranteed auto financing expert. If you do not have down payment, do not worry. Seek bad credit no money down car loans to enhance your shopping experience.

Analyzing APR: Tips to Consider before buying your Next Car

The idea to spend money cautiously is one that sounds simple in words but becomes difficult to execute. Especially, when you fixate your eyes on a new car that you wish to make your own. However, a clear mind, knowledge backed by research and a strong mindset will not only help you buy the car you love but will also save your money.

APR 101: Understanding the Annual Percentage Rate in Detail

 

Seeking your own answers to the following questions on APR will help you plan your finances in the correct manner. 

1. What exactly is an APR? 

The literal meaning of APR is Annual Percentage Rate, which in effect is the yearly amount that you will pay on your auto loan. Typically, an APR is the actual price that you pay for the borrowed money over the loan term. For instance, if you seek out an auto loan of $500 with an APR of 10%, the interest that you are expected to pay is $50 for that year, depending on your auto loan deal. 

2. What is an Ideal APR Number? 

According to Statista, the general APR on auto loans is close to 4.96%. However, the APR that the auto lenders offer you will depend on your credit score and credit history. The higher your credit score, the better are your chances of obtaining a lower APR. For instance, consumers who have a good credit score of 760 or more, get an auto loan with APR as low as 2% to 3%. 

Alternatively, for subprime car buyers with a score of 580 or lower, the APR can be in the range of 10% to 15%. Therefore, the reason an APR becomes important is that a good APR means responsible spending that helps you save in the long run. 

3. How to obtain a Good APR on your Auto Loan? 

 

A good credit score will help you in attaining a good APR as lenders are more certain about their investment in you. In order to strengthen your credit score, clear off all past debts and payments. Also, make all your current payments on time. Another factor that can help you in getting a low APR is the length of the loan. Usually, an auto loan with 60 months or lower, will assist you in getting a good APR. Also, the age of the car plays an important role in ascertaining the number. The newer the vehicle, the lower the APR on your car. 

Stay Aware: Make an Informed Car Buying Decision

Acquiring a good APR on your auto loan is not a very difficult task. The average rate of interest for US auto loans may be low. However, you should be aware of your personal credit score and financial situation. It will give you the edge to effectively negotiate a good APR on your auto loan. Therefore, stay aware and focused on your current financial standing and the path ahead to get your car will become easier. 

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