Buying a car isn't easy for everyone. With a tight budget and less than perfect credit, financing a reliable vehicle that you can afford might seem impossible. Here, you'll find a few tips that can help you decrease the monthly cost of owning your car.
Find the Right Car
When it comes to auto loans, the value of the car has more to do with the approval than your credit does. If the value of the car is greater or equal to what you're requesting to borrow, chances are, the application will be denied. This is because the lender needs to know that if you fail to pay the loan, they'll still be able to recoup the money by selling the car at auction. When the value isn't there, it will be too great of a lending risk to take.
So, what this means is that you have a better chance of qualifying for a loan if you find the right car at the right price. If you find a car that you like, but it's priced too high, you can haggle a bit, or you can move on to another, similar car that's priced more closely to Blue Book value.
Compare Loan Offers
Spend some time comparing the different loan offers that you receive, paying special attention to the details. With auto loans, you'll sometimes be required to choose a car within a certain range of years in order to take the loan out for an extended time. For example, if you find a car that was made in 2008, the loan offer may be at 12% for 48 months, but if you find a car that was made in 2012, the offer may be at 8% for 56 months. This could get you into a newer, more reliable car at the same monthly cost as the older, less reliable car – even if it does cost more.
Make sure to read through all of the loan contract so that you fully understand what will happen if you miss a payment, if you pay the loan off early and how much insurance coverage you'll be required to carry during the duration of the loan.
This is a long-term investment, so take your time as you make these decisions. With careful car selection and paying attention to the loan rates, you may find the perfect car at the perfect price and end up driving away with it wearing a big grin. Contact auto loan lending services near you to learn more.