Your Complete Guide to Financing a New Car
Did you know that from 2007 to 2019, car prices have surged a staggering 29 percent?
And in August 2019, the average price of new vehicles went up 2 percent from the year before to a whopping $37,401.
All those price hikes can explain why there were around 113 million auto loans in the U.S. in the third quarter of 2018. After all, very few people can afford to shell out that kind of cash.
What’s more, financing a car purchase isn’t as difficult as it was before. Today, many lenders have more relaxed car loan requirements.
This doesn’t mean, however, that you already have a 100 percent approval guarantee. There are still some steps you should take to increase your odds of getting that yes from an auto loan lender. Read on for more.
Make sure your credit report is accurate
Credit report errors are more common than you think, affecting more than one in five U.S. consumers. If you’re one of these folks, you’ll look riskier to lenders than you really are.
This could either result in you getting denied for an auto loan or getting a higher interest rate. In fact, these errors could also be a reason to get denied for payday loan applications.
So, before you start the process of financing a used car or a new one, get your free credit report and review it to make sure there are no mistakes.
Research on your preferred make, model, and year
Look up the market value and the manufacturer’s suggested retail price of the car you want to buy. If you’re buying used, use car appraisal tools, such as those from KBB.
Either way, they’ll help you come up with a more accurate picture of how much the car you want is. From there, you can create a budget that you can stick to when taking out an auto loan.
Look beyond banks
True, banks are the primary issuers of car loans, having issued $368 billion worth of auto loans in 2017. But even with their relaxed standards, they still say no to borrowers with low credit scores.
That said, you should extend your loan applications to dealerships and online lenders. Get quotes from these lenders and apply for pre-approval. This way, you can compare rates and incentives and find a deal that best suits your budget.
Don’t hesitate to negotiate
Negotiating in a polite and reasonable manner is key to getting a good deal from a dealership. However, you’d need to arm yourself with facts and data about the car you want first. So, be sure to follow the tips above so you can have more negotiating tools at your disposal.
Increase your loan approval rates when financing a car
There you have it, your ultimate guide on financing a car and the strategies that can help you get a yes from a lender. Start with a thorough review of your credit report first, so you can get rid of potential errors. From there, you can shop around for the best car you can afford and an auto loan deal that you can qualify for.
This is a collaborative article.
The News Wheel is a digital auto magazine providing readers with a fresh perspective on the latest car news. We’re located in the heart of America (Dayton, Ohio) and our goal is to deliver an entertaining and informative perspective on what’s trending in the automotive world. See more articles from The News Wheel.