Auto Loan

Should I finance my car through dealer, or my bank? Many of us have similar questions every time we purchase a car (new or used). Short answer is: maybe neither one. In order to answer this question we need to know more of the facts.

Before you buy (or lease) your car, shop for the best financing. Dealers and lenders offer a variety of loan terms and payment schedules. Compare the Annual Percentage Rate (APR) and total finance charges offered by banks, credit unions, savings and loans institutions, and other loan companies with the financing offered by the auto dealer. You will be better prepared to negotiate the selling price and make your buying decision.

Keep these rules in mind while shopping:
 

• Before you borrow money, search several sources. Ask each lender to answer your questions in detail.
• The longer the payment time, the more the interest charges you will end up paying. Calculate different time frames Because interest rates vary, shop around for the best deal and compare the annual percentage rates (APR).
• When comparing the offers, look at the total cost and not just the monthly payments.
  Find out what other expenses are involves, such as lien holder fees, state re-registration fees etc.
• Be hundred percent sure before signing for a auto refinance loan. I know it might be boring but always read through the small print.
• Read and understand every document you are asked to sign.
• Do not sign anything until you have made a final decision to buy.
• Make sure whom you are dealing with. Are they just a website with no physical address? Can you talk to someone when you need to?
• Do not take possession of the car until the car loan paperwork is final.
   

Other Conditions to Consider When Deciding for an Auto Loan:

Some dealers may dealers offer very low car loan rates for specific cars or models, but may not be willing to negotiate the price of these cars. To qualify for these special interest rates, you may be required to make a large down payment. With these conditions, you may find it is more affordable to pay higher financing charges on a car with a lower sales price. Or you may need to purchase a car that requires a smaller down payment.

Be alert about advertisements offering financing to first-time buyers or people with not so good credit. These offers often require a big down payment and a high APR. If you agree to financing that carries a high APR, you may be taking a big risk. If you decide to sell the car before the loan expires, the amount you receive from the sale may be far less than the amount you need to pay off the loan. If the car is repossessed or declared a total loss because of an accident, you may be obligated to pay a considerable amount to repay the loan even after the proceeds from the sale of the car or the Insurance payment have been deducted.