Auto Loans and Car Loans
are commonly used when purchasing a new or used car. Some people are
fortunate enough to have saved enough money to pay cash for a new or
used auto, but, most people will find that they need to borrow money to
buy that new or used automobile.
A auto loan can come in many different forms and ways. You may be able
to borrow the money from a family member and they may offer better
payment options than other institutions.
When you buy a car you will use the car dealer to normally try and get
you an auto loan. The car dealers have a variety and selection of
lenders that they use for different types of car loans. An example would
be if you have bad credit or no credit, the car dealer may have a lender
that will make exceptions and loan you the money if you have a down
payment, job and are willing to pay a higher interest rate.
When you have great credit, you will will get the best terms and rates.
If you are in the high 700's or 800's, you will get the best rates the
lenders have to offer because they believe they will not have any
problems with you paying the loan back in a timely manner without legal
If you have a lower FICA score you will find that money is available,
but, it will be more expensive and you will have to qualify. Having a
job and work history is very important to a auto lender because they
believe you will continue to work and have a paycheck and make your
payments. Historically, that has been the case.
When the economy gets bad and people start getting laid off, the rules
change and they can change quick. We have seen in the last year or so
credit drying up for even the higher score people leaving people with
great credit in need of auto loans.
Some of the car companies will offer select financing on some of their
new and used models, depending on which company and what models you are
looking at. The most popular cars that are selling well do not need
incentives and you will pay the market rate. The models that are not
moving well could get you 0% financing or higher plus some cash back
We do not make auto loans and when it comes time to shopping for autos
and auto financing we recommend that you shop around and do not take the
first car or offer. Always negotiate on the car and then negotiate on
the auto loan as well. The car dealers have some lead way and can
usually make your deal work if you stand strong. If not, tell them you
will think about it and get back with them. This will usually get them
to accept your offer if it is close and reasonable.
Saving money is the best way to make money and since buying a car and
auto is a large purchase, negotiate the best deals you can for both the
car and the financing. Most large car dealers make the most money on
their financing. So, you do have a choice and never just pay what they