The details of your automobile financing are important
Before you get completely swept away in the excitement of buying a new car, take just a minute to think about your automobile financing. Financing your automobile purchase doesn’t have to be complicated or time-consuming, but the details of your loan are important. You should never blindly accept the automobile financing offered by a dealer. You should always comparison shop for automobile financing because just a slight difference in your interest rate or a few extra months tacked onto the end of your loan term can be a huge, unnecessary expense. At Car Deal Expert, you can get pre-approved for automobile financing without any cost, hassle, or obligation. Just fill out one short application, and we’ll match you with a reputable online lender offering the best terms available for your individual financing requirements.
Get pre-approved for new car financing
Before you start shopping at car dealership, apply for a car loan pre-approval at Car Deal Expert. An online loan pre-approved is the starting point for a successful purchase transaction. Once you’ve got your pre-approval, try to keep your car-buying option open. Rather than focusing on one particular vehicle to the exclusion of all others, have two or three models in mind and be ready to accept whichever one ultimately best suits your needs as well as your budget. By focusing only on one model, you may be setting yourself to overspend. You’ll leave yourself more room to negotiate successfully with sales people when you walk into a dealership armed with an independent loan pre-approval and are prepared to consider more than one vehicle. Especially when it comes to options and add-ons, having a loan preapproval in hand at the dealership will make it easier to make decisions and negotiate effectively.
Good vehicle financing involves more than a low monthly payment
A low monthly car payment doesn’t necessarily equate to a reasonable purchase price or a good auto loan. An affordable payment is important, of course, but if it takes an extra-long loan term — say 60 months or more – to get your payment low enough, you’re probably buying more car you can afford. Finance experts suggest that your auto loan payment should not exceed 15% of your after-tax monthly income, but if it takes an extra-long term to get your payment that low, at some point before the loan is paid off you’ll owe considerably more on the vehicle than it’s worth. That’s called being “upside down” on the loan, and it’s a situation you want to avoid if at all possible. When you’re upside down on a vehicle loan, you can’t sell the car unless you can come up with a lump sum of cash to pay it off, and you can’t trade it in on another car without adding the remaining loan balance to your new loan. When you tack an old loan balance onto a new one, you dig yourself into an even weaker equity position and create a vicious debt cycle. Each time to add an old loan balance to a new car loan, you go upside down sooner and for longer. Avoid getting stuck in a frustrating and seemingly endless cycle of debt by deciding how much you can afford to pay for a car in total — not just how much you can pay every month — before you visit a dealer. You can figure that out right now by applying for a loan pre-approval at Car Deal Expert.
What to look for when comparing loans
Once you’ve got your online loan preapproval, dealers will typically try to persuade you to accept their financing by offering you a lower monthly payment. But remember, when comparing loans, don’t just look at interest rates and payment amounts. Pay close attention to the total of payments and Annual Percentage Rate (APR) shown on the Truth-in-Lending disclosures. The Truth-in-Lending disclosures will show you just how much difference a slightly higher interest rate or a slightly longer loan terms can make in the overall cost of a car. All else being equal, a longer loan term will lower a monthly payment, but it will increase the overall cost of the vehicle. A higher interest rate will increase both the monthly payment and the overall cost of a vehicle. A longer loan term can lower the monthly payment, even if the interest rate is increased, but overall you’ll pay more for you vehicle than you would with a shorter term and a lower interest rate, even if the shorter term makes the monthly payment higher. So when you’re comparing loans, pay close attention to the Truth-in-Lending disclosures.
A few things to keep in mind
Getting an online preapproval for automobile financing at Car Deal Expert will help find a car that meets your requirements at a price you can afford. Shopping for a car and trying to sort out financing issues at the same time can be confusing. So before you start shopping, apply for a preapproval at Car Deal Expert and keep these things in mind:
- Being preapproved for a loan makes it easier to negotiate successfully with a car dealer
- Being preapproved for a loan helps you avoid spending more than you can really afford
- Being preapproved for a loan helps you make the right decision about dealer financing
- Applying for a loan preapproval at Car Deal Expert saves time and avoids hassles
- Getting the best car loan available saves you money every single month
- At Car Deal Expert, we specialize in comparing loans to find you the best one available