Grab a copy of your credit report
You can’t blame many financial experts and bloggers across the internet for continuously nagging about the importance of your credit report, because checking it is always, always the first step to take in any type of loan you’re planning to obtain. Before you even consider applying, make sure your credit report is in good shape, not only to make your application easier, but for you to get the best rates.
Decide on the right car
When deciding which car to purchase, it’s not enough to dream about the makes and models and how you would look whenever you’re driving them. One important consideration is choosing between new and used vehicle. While everyone would love a new car without a doubt, it may not always be necessary in all situations. If you have a nice stash of money then by all means go ahead. But if you have a limited budget, and you want the lowest monthly payments possible, then you might want to consider getting a used car instead.
Of course, money is not the only consideration. If you’re buying used vehicle, there’s probably a lot more work to do, such as checking the vehicle’s history, mileage, performance, gas usage, safety features, and more.
Decide between buying and leasing
Another crucial choice you have to make is to choose between leasing and buying. When you’re leasing, a financing company or lender will purchase the vehicle for you and you will in turn make monthly payments or “rent” to the company. Payments can be lower compared to purchasing the vehicle, and you might not be required to provide deposit. However, the vehicle is not legally yours until you pay a substantial amount at the end of the contract to buy it outright, if there’s an option to do that.
On the other hand, if you’re looking to purchase a vehicle, you can expect to pay higher every month, and even provide a down payment. However, the vehicle can be yours, and you have the right to do whatever you want with it, such as customize it, trade it, or sell it.
Determine how much you can afford to spend
Of course, before choosing between different loan terms, you have to ask yourself how much you can afford to pay every month. It doesn’t make no sense to decide on the vehicle you want, and the payment options available, only to find out that you cannot afford them. Make sure you obtain an exact figure of your earnings, expenses, other resources, and surprise expenses that could come in the middle of your loan.
Negotiating for prices
Once you got an offer, don’t settle for it right away, especially if you have a decent credit score. Take the time to visit other lenders and let them know what the previous dealer offered you, so that you can bargain for a better cost.
Save money on insurance
Every car driver and owner needs an insurance, however, it is not required to get it together with your loan. In most cases, you have a better chance of saving money on insurance if you take it outside of the loan, so it pays to shop around.