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Say Hello to a Good Buy: How to Make Financing a Car Less Complicated

Here at Your Family Finances, we strongly recommend driving your old vehicle as long as possible while saving for a new one, even if it occasionally requires repairs. But  sometimes repairs become uneconomical. If you look at your car and wonder how much longer it’s going to get you where you need to go, it might be necessary to replace it with a newer model. If you haven’t saved up enough to pay cash for your next vehicle, the thought of financing a vehicle may be frightening, but it doesn’t have to be that way. You can find financing that is simple and straightforward. Here are a few suggestions to help.

Talk to Your Bank or Credit Union First

One of the first places to go is your own bank. They know you, and they can determine which loan product will be best for your situation. Local banks often have decent rates and can give you the best option for financing a new or preowned vehicle. Your lender may also offer advice if you don’t qualify for financing. If you qualify for membership in a credit union you should certainly open an account with them. Often they are member owned so they are more likely to offer better rates and have more than their own profit interests in mind.

Have a Down Payment

You’ll qualify for more loan options if you have a down payment (and the bigger the down payment the  better). You can use your current vehicle as a trade-in, but consider selling it on your own. You might get a better deal and have more money for your down payment. Make sure you know the Blue Book value of your vehicle whether you trade it in or sell it.

Apply for in-House Financing

Most car dealerships, have in-house financing for you to consider. For instance, if we look at Bay Ridge Nissan ‘s website we find the following quote “With hundreds of cars in stock and a range of financing options, we can help you find the car that fits your lifestyle and suits your needs…  strives to provide each and every customer with a smooth financing experience.” You’ll often discover that these car dealerships have arrangements with multiple lenders with some packages designed for first-time car buyers or those with past credit problems, other lenders offer better interest rates for those with higher credit ratings. Be aware that the finance department at these dealerships might submit your application to multiple lenders and so your credit could be checked multiple times. These inquiries will likely count as one since they all happen at the same time.

Check Your Own Credit First

If you’re concerned about whether you will qualify for financing a vehicle, you can check your own credit report. You can pay for a credit score, which will tell you how easy it will be to qualify for a loan. But if you have an account with certain credit card companies like Discover they offer the option of checking your credit score through their website for free so you can track your score regularly. By knowing where your credit score stands, it allows you to focus on lenders who specialize in loans for people with that level of credit. When you apply for a car loan, you’re more confident of being approved.

Financing a vehicle doesn’t have to be complicated or frustrating. Know where to go for a loan and what you can do to improve your chances of approval. Before you know it, you’ll be driving home in that new vehicle with no worries about getting to the places where you need to go.

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