Does Shopping for Car Loans Hurt My Credit?

If you’re fearful that a car loan application will hurt your credit score, then this is the blog for you. Follow along as we explain how the top three credit reporting agencies typically roll multiple auto inquiries into one inquiry on a continuous, 14-30 day cycle, and why applying for a car loan typically won’t hurt your credit.

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Car Loan Shopping Doesn’t Hurt Credit

While shopping for credit can sometimes signal bad news bears to creditors (i.e higher risk), most credit scores aren’t drastically impacted by multiple inquiries from auto lenders within a short period of time.

The top three credit reporting agencies (TransUnion, Experian, and Equifax) understand that people are typically going to shop around when searching for the right auto, home, or student loan. After all, not all financing companies and loan offers are created equal! Shoppers may find varying interest rates and payment plans depending on where they go and when they apply. It’s all about finding the right loan offer for you and sometimes, it takes more than one loan offer to get there.

Lenders also know that you’re probably not trying to buy multiple homes or cars–you’re just trying to find the best rates and terms. Credit scoring systems have evolved over time to reflect this reality.

But You May See Multiple Inquiries on Your Credit Report

While your credit score isn’t likely to take a hit when applying for car loans, you may notice multiple inquiries on your credit report. Each time your credit report is reviewed by a different lender, an inquiry will appear showing who accessed the report and why. This is technically called an “inquiry,” though you may also hear “check” or “pull.”

Inquiries include information about who’s making the inquiry, what it’s for, the date it’s made, and the type of inquiry.

Experian, for one, will list each inquiry that is made in your file for two years, but these inquiries will only be counted as one inquiry when calculating your credit score.

That said, you want to apply for credit wisely. Don’t spread out your loan applications over a long period of time, as this will spread out the credit inquiries, too. As long as inquiries are made within about 14 days, they are counted as just one when your credit score is calculated. Space them out too much and you run the risk of having them be counted as separate inquiries.

And Certain Inquiries CAN Impact Your Credit Rating

A single hard credit inquiry typically won’t play a major role in whether or not you’re approved for financing. Lenders understand that most people compare loan options when buying something as big a house or car.

Still, it’s not a good idea to apply for a bunch of different credit cards and loans at one time. Multiple hard inquiries for different types of credit in a short period of time can signal to lenders that you’re in a financial pickle. They may assume you’re having trouble paying bills, getting ready to rack up debt, or that you’re short on cash—all signs that you could be a risky loan recipient.

Examples of hard inquiries include applications for a mortgage, auto loan, credit card, student loan, personal loan, or apartment rental credit checks.

The lesson? Only shop for one type of loan at a time and don’t drag out your financing applications over a long period of time. If your credit has been hurt in the past, work to build a healthier credit score by paying your bills on time, having a low balance on your credit card, maintaining a long credit history, and applying for new credit sparingly.

Go the Easy Route, with myAutoloan

myAutoloan is one of the fastest routes to smart auto financing. There’s no need to submit multiple applications in order to view multiple offers, and no need to navigate to different websites. Just submit one application and view up to four offers in a matter of minutes. Our applications are free, fast, and easy, and we’ll never pressure you to use one of our lenders’ offers or loans. Apply worry-free to buy the car you want. When you have nothing to lose, why wait?

Ideas on Getting the Best Used Car Finance Rates

Ways to Get the Best Used Car Finance Rates

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Getting financed for a used car can sometimes seem like an overwhelming and daunting task, but it doesn’t have to be. Finding the best used car finance rates can only occur when you take the time to research and understand the various advantages and disadvantages of different financing alternatives. There are a number of things to take into consideration when searching for financing solutions:

Credit Score

This is an important factor to take into consideration when searching for used car financing options. Many times, your credit rating will be the determining factor in whether or not you are approved for financing. Getting used car finance approval will likely be made difficult if your credit score is less than satisfactory, which means that you have had late payments, missed payments or underpayments on past credit cards or loans. Essentially, the financing agent will use the credit score to determine how likely you are to make payments on time based on your previous credit history. If approved, this may also determine how high your payments are and how long you are able to be financed. It’s not likely but It is also possible that you may be required to have a co-signer in order to be approved.

Income

Another vital consideration in used car financing options is your income. The financing provider will take into consideration what your monthly income is before determining a proper payment plan. The lower the car payments, the longer the period of financing will be. To get the best used car finance rate, try to stick with a car that you can have paid off within 12 to 18 months. Yes, that is not always possible but it’s worth the effort to see if this is something that you could make work for you. This will help to insure that you do not face additional or higher rates, yet the loan period is sufficient time to dramatically improve your credit rating. If you are required to have a co-signer to obtain used car financing, keep in mind that his or her income will likely be included in determining the finance rates.

Research

As you know, some car dealerships have their own financing agency on the lot, others go through an outside bank to finance the auto loan for their customers. Those that finance on the lot are often easier to obtain financing through because they focus more on income and less on credit scores, a valuable trait to the customer who has a blemished credit history. You might want to learn more about how this process works so it might be beneficial if you take time to review a Guide on Auto Financing. The key to finding the best financing rates is taking the time to search around before making a decision. Purchasing the first car that you qualify for is not always a good idea because it could leave you with higher rates than you would have faced if you had done a bit more researching before making a purchase.

Getting a good auto financing rate is challenging but not hard. Learn as much as you can and understand the process of auto finance. Make the effort and you will come out ahead when you move forward to buy and finance your next new or used auto loan. Good luck and good shopping!

Why Memorial Day Weekend Is Best Time to Buy a Car

The start of summer is a time for cleaning up, starting fresh, and saving big. Think neighborhood yard sales, beach vacations, and block party picnics! Hands down, it’s also the best time to buy a new car. Could summer be any more awesome?!

Memorial Day weekend, along with the month of June, is the absolute best time to buy a car. Find out what makes this time “the best time to buy a car” and how you can maximize your savings on a new car purchase.

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When It’s the Best Time of Year to Buy a Car…

Leverage the Dealer Inventory

Just like you feel the need to clean out the garage and comb through the attic at the start of summer, in a way, so do car dealers. Auto dealership need to clear inventory to make space for next year’s models, which come out around August. Memorial Day weekend is early enough in the year that there’s also leftover inventory of brand new vehicles from the previous year.

Inventory levels are in your favor through June. You can not only get a new car, but also a huge discount and sometimes a warranty that starts at the time of purchase.

Look at cars that are being phased out or replaced with newer models, as they’re more likely to be deeply discounted.

According to TrueCar data via CNBC, May proves to be one of the best months to get a great deal on a car, especially if you’re looking to buy a family-oriented midsize SUV.

Be an Informed Car Shopper

Walk into the dealership equipped with knowledge (and auto financing). You’re in control when you know the incentives and rebates, and already have your financing secured. Dealers will look at you like a powerful cash buyer. Plus, auto manufacturers love showcasing some of their best deals over Memorial Day weekend. If you’re flexible on the make and model of your new car, you can maximize your savings by narrowing your search to only these vehicles.

According to U.S. News & World Report, the best Memorial Day new car deals include:

  • 2018 Buick Enclave – Lease deal of $389/month for 39 months with $2,989 due at signing; the deal includes total of 32,500 miles
  • 2018 Nissan Sentra – Lease deal  of $149/month for 36 months with $3,249 due at signing; the deal includes 12,000 miles per year
  • 2019 Jeep Cherokee – Purchase deal of up to $2,000 cash bonus
  • 2018 Fiat 500X – Purchase deal of up to $1,750 cash back
  • 2018 Ford Focus – Purchase deal of $4,000 cash back
  • 2018 Toyota Avalon Hybrid – Purchase deal of $5,000 cash back
  • 2018 Chevrolet Cruze – Purchase deal of $2,000 cash back

Call ahead and check with your local dealership to confirm that these deals are available in your area. Manufacturer-backed lease deals and cash back offers offers can vary around the country.

Secure Financing Ahead of Time & Don’t Give Up!

Can’t buy a car at the best time of year? There’s still plenty of savings to be had, especially if you secure auto financing before you arrive at the dealership. With financing in hand, you’re ready to get the best pricing on your new or used car. You’ll know how much you can afford and how your purchase is going to fit into your budget. Plus, you’ll be treated like a powerful cash buyer.

Other great times to buy a new car include:

  • The week between Christmas and New Year – Look for sweet deals on leftover models and large rebates on all remaining models
  • January and February – Consider the most recent models, as manufacturers tend to raise prices as the year goes on
  • President’s Day, 4th of July, and Thanksgiving weekend also top our list for great times to buy a car

Move fast to make your Memorial Day dreams of buying a new car a reality. Summer will be over before you know it! Get the auto financing you need, fast, with help from myAutoloan. Whether you want to buy a new car or a used car, you can submit one car loan application and compare up to four offers today. Don’t miss out on one of the best times to buy a car!

 

When to Buy Your Leased Car

You probably didn’t think about buying your car when you first leased it. Perhaps you enjoyed the low monthly payment, the opportunity to drive a luxury car, or not having to worry about major repairs 100,000 miles down the road. With only a few months left on your car lease, though, you’re considering buying out your lease. How do you know if it’s time to buy your leased car or time to walk away at the end of the lease? myAutoloan is here to help. There are actually a few scenarios when buying out your lease makes the most financial “cents!”

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When Should You Buyout Your Lease Car?

When your buyout amount is less than or close to its private-party value

First things first: Buying out your lease has to make financial “cents,” or sense if you want to get serious. Start by finding out your residual amount, or the buyout amount. You can find this number on your online account, monthly statement, or by calling the bank that holds your lease.

Compare this amount to the private-party value of your car. You can easily plug in the vehicle details on Kelley Blue Book to get this amount. If your buyout amount is pretty close to (or fingers crossed, less than) the private-party value, it might make financial sense to buyout your car lease.

When you’ve gone over your lease mileage limits

Car leases come with a limit on the number of miles the car can be driven. This limit is typically 12,000 miles per year over a 3-year lease, but it can vary. If you’ve exceeded your lease mileage limits, buying your car might be a better financial route than returning it at the end of the lease. Why? The leasing company is going to charge you for every extra mile on the odometer. Check your lease for the penalty amount. It could be as much as $0.25 per mile. If you buy the car, you won’t be penalized for going over the allowed miles.

When the car has definitely seen better days

Did you drive your leased car like an Indy 500 racer? Like Thelma and Louise on their fatal cross-country adventure? Like any driver in one of the Fast and Furious movies? You get the point. If you put the pedal to the metal, then there’s a good chance your leased car has excess wear and tear. The bigger the damage, the bigger the penalty. If you buy your leased car, you won’t be penalized for dinging, denting, scratching, or staining the interior or exterior of the car.

When you really, really, really like your car

Not everyone makes decisions from a financial standpoint. Some people let their emotions or preferences guide their choices, and that’s okay, too. If you adore your leased car and can’t imagine letting it go, then buying your leased car makes sense. Follow your heart and keep the car!

When you don’t want to hassle with car shopping

You’re essentially starting from ground zero after you turn in your leased car. Time to start researching car models, comparing prices, planning trips to the car lot, and dealing with aggressive salespeople. With your leased car, you know exactly what you’re getting. You know your vehicle’s history including how and where it’s been driven, what it’s been used for, and how often it has been maintained. When you buy a car you’re already familiar with, you can driver easier and sidestep the many headaches that come with car shopping.

Apply for a lease buyout loan

When you love your car but not your lease, go with a lease buyout. The dealer will typically contact you about buying the leased vehicle near the end of your lease term. You can accept the dealer’s offer, decline, or negotiate a better price. Yes, you heard us. You may be able to negotiate a great low price on the vehicle you already know and love.

Review the terms of your lease contract and and when you’re ready, apply with myAutoloan to see up to four lease buyout loans in a matter of minutes!