Must Know: Car Loan Tips

If you are thinking of purchasing a new car, odds are that you are thinking of getting an auto insurance loan. Here, we’ve listed 5 crucial tips that will help you get the best deal on an auto loan.

Check Your Credit Score

Your credit score is a crucial factor that helps you qualify for a lower rate of interest. That’s why it’s necessary that you check what it is before you start shopping for a loan. If you find that your score is unusually low despite you having paid off all your bills and maintaining low credit card balances, it’s a good idea to get a copy of your credit report so you can check for signs of fraud.

Get the Shortest Term Possible

If your financial situation allows you to, we recommend you get an auto loan for a short tenure. Not only will the interest rates be lower but you’ll also save a lot of money by paying less, in terms of overall costs, for your car.

Make a Large Down Payment

It may seem tempting to buy a car without paying any down payment, but this will seldom get you the best rate. Paying a larger down payment will help you get a lower interest rate, which can, in turn, significantly lower the cost of your loan. At a minimum, you should try to make a down payment of 20%, if not more.

Time It Right

With auto loans, timing is everything. If you can, we recommend waiting till the later months of the year to shop for a car. It’s also a good idea to visit a dealership towards the end of the month rather than the beginning. These are the times when salespeople need to meet their quotas, so may be more likely to lower their prices for you.

Pay for Taxes and Fees

Rather than add the cost of taxes and extra fees to your loan, paying them off yourself will save you a lot of money. After all, why would you want to pay interest on small amounts that you can easily pay in cash? It may seem like a small detail but could save you a lot of money over the loan term.