What is the Right Way of Buying a Car?

Buying a car can take a toll you. The entire process of finding a lender for your chosen car can drive you up the wall. But, here’s the fact: Auto loans are a necessity. Cars have become very expensive and in order to buy a car of your choice, you need to deal with the financing process. Do not worry. With the right approach, finding an auto loan will be a pleasurable experience for you.

What goes Wrong?

Car buyers spend days in finding the car of their choice. After meticulous research, endless discussions and several visits to the dealership, you select the car of your dreams. Then, you begin the car financing process and you select the very first deal offered to you. This is where you go wrong.

Learn the Right Approach for Buying a Car!

Buying a car is not like shooting in the dark. You need to have a well-thought strategy to get the best auto loan. If you proceed without much thought, you will not get the most beneficial deal.

Step 1: Review your Credit Application

Every auto loan application includes your credit score, income, employment details and other personal information. Before submitting your application, step back. Check how well you fare on the lender’s criteria. Do you have a good credit score? Have you been at the same job for more than a year? Do you have minimum debt? If you are a less-risky and stable borrower in the eyes of traditional lenders, you will have no problem in getting an approval. If you have got bankruptcy or repossession in the past, there are chances that you may have to opt for dealership financing.

Step 2: What’s the Type of Car you want?

Don’t decide on the exact car make and model. For example, if you really like Toyota Corolla, don’t pin down the exact year of manufacture, color and specifications. List down a couple of cars that fit your requirements. Honda Civic, Chevrolet Bolt, Hyundai Elantra, Toyota Prius and many more similar compact cars are available in the market. Select the type of car that you want to buy and make a list of your preferred choices.

Step 3: Apply for an Auto Loan

Now, is the perfect time to apply for an auto loan. Remember to apply with multiple lending sources to enjoy the best deal. Do not worry about hard hits on your credit report. According to Fair Isaac Corporation, if you obtain a loan within 30 days, multiple loan inquiries in relation to the specific loan will be considered as just one. It means no matter you apply with different lenders, dealers, or banks, your credit ratings will not take a hit. The tenure of 30 days can be reduced to 14 days if the lender uses the older formula. Also, it can go up to 45 days if he uses the latest one.

It means you just have close to a month to seal the deal. So, it makes more sense to have a list of cars ready with you. Doesn’t it?

Step 4: Analyze the Contract; Select the Car

When you apply with different lending sources, you will get the benefit of choosing the most advantageous deal. Study the auto loan contracts in detail. Check for auto loan terms and penalties. Do not say yes just because you see low monthly payments. Do a thorough analysis.

Do not worry if a dealer is offering you an auto loan deal. Dealership financing is fast becoming a reliable means for getting a car. Having a list of cars at your beck and call will help if you are approved by a dealer. In such a situation, if the dealer doesn’t have the best deal on Corolla, you can move on the next choice and close the deal quickly.

Obtaining an auto loan is easy when you have a plan to follow. Do not say yes to the very first deal. Know your budget, understand your preferences and then apply with lenders to get the best deal. Remember that you do not need to spend a large amount of time on selecting a car, instead your focus should be on getting a favorable auto loan deal.