Must Know Information About Auto Loans

If you are thinking about purchasing a new car, chances are you are also thinking about automobile loans.  Although purchasing a car outright in cash can save money on interest, it is very rare for someone to have $15,000 to $30,000 in cash lying around to splurge on a new car.  At the same time, you should be careful about vehicle financing to ensure you get the best deal in the long run.  You sign an awful lot of paperwork in a dealership finance office, and it can be easy to get confused.  Here are a few things you should know about automobile loans to make the process easier.

•    Your credit score is going to play a huge role in how much the vehicle ends up costing.  Make sure you know your credit score and have done everything you can to clean up any issues with your report.  Delinquent payments and collection actions can wreak havoc with automobile loans, so take care of those at least a month before applying for the loan.
•    There are often hidden costs associated with your car purchase.  Dealers may tack on paperwork fees or other charges.  Never sign anything until you see a detailed listing of charges, and do not be afraid to ask questions.  If you do not understand the invoicing and charge details, bring along a financially savvy friend or family member to go over the numbers with you.
•    Despite what many people believe, you are not restricted to the dealership bank relationships for automobile loans.  You can find your own lender before stepping foot on the lot.  Today, you can work with numerous online lenders to find financing options that are right for you.  Online banks often deliver quality customer service and lower interest rates.
•    You do not have to sign up for extended warranty, under coatings or GAP insurance in the dealer finance office. These are extra services provided by venders who sell them through the car dealership.  Most of the time, you can purchase these items separately. When you finance any of these extras, you are paying more for them because of the interest.  If you can, opt out and pay cash later for any extras.
•    You can save a lot of money by applying the same principle to things like luxury wheels or a decked out stereo system.  Often, cars that come with all these items are much heavier on sticker pricing.  Before you commit to a purchase, research the cost of items separately.  You may come out better purchasing them after the fact.  This is especially true if you do not want or need all the options in the luxury package.  If you care nothing for the sunroof and in-car DVD system, and only want a navigation unit and nice trim, you could save thousands of dollars.

When it comes to automobile loans, you should conduct full research to get the best possible deal.  This includes researching for a great price on the vehicle and not financing extras that you do not need or can be purchased later.  It also includes checking out online banks and other lenders to ensure you receive the best possible interest rate.