An auto dealer exemption was tacked on to the financial reform bill. The auto dealers’ exemption allows them to escape auto lending regulation that could have prohibited many common deceptive auto lending tactics. In case you are thinking about getting your first car, these are the things you have to know first. Before getting auto financing, you’ll also want to research.
Car payments seem lower while interest rates seem higher
AOL Autos reports the auto financing operations at dealerships, not auto sales, have become their real profit generators. Car dealers sometimes don’t even mention interest rates, they just ask what kind of monthly payment a buyer is looking for. An interest rate one or two points lower could save a car buyer hundreds or thousands of dollars over the life of the car loan. Car buyers have to be careful working with an auto dealer on car loan for their next automobile.
Learning rate of interest deals and credit score
Bankrate.com reports that you’ll get a rate of interest from a dealer that gets wholesale interest rates from other people. Dealers mark up those rates by up to 3 percentage points. Numerous dealers hope the consumers do not know what interest rates they qualify for so higher interest rates could be charged. Before going in for a car, do your research and learn what interest rates you qualify for with your credit score.
Get approved before making your way to car salesmen
Before going to a car lot, you need to get a loan approved so you know what interest rates you qualify for. As outlined by the New York Times, dealers are always trying to make just a little extra money off people who already got their loan. Some things they make an effort to sell are window etchings, disability insurance or other kinds of insurance. Numerous dealers tell the customers that they can only get their loans with extra add-ons, although this is illegal.
Make sure your loan approval and condition of the sale aren’t correlated
The Times article mentions a tactic called the “yo-yo.” Buyers can get their cars and leave just to get an annoying phone call just a little later saying the loan didn’t go through and needs to be changed to one with a higher interest rate. If you get the loan before you do anything, this will be avoided. Bankrate.com suggests you gets financing from the dealer before other things continues. You may have to wait a few days longer than before, but it is worth it.