e- Best Auto Loans

Shop for a auto loan quote before you visit a dealership or bid for a car over the Internet. Contact your bank and several other local lenders plus compare auto loan quotes online. Ask about the loans they offer – the number of months for which you can borrow, the interest rates being offered, whether there are penalties if you pay the loan off early, and so on. Ask about other options for financing the car.

For example, some homeowners may want to consider a home equity loan or line of credit instead of a traditional auto loan. “A auto loan tied to your home may be available with very attractive terms, and with recent gains in the housing markets many folks have some built-up equity available to use for a new car,” says Creamean. A home equity loan also may come with tax benefits (but consult your tax advisor). Important to remember is that if you pledge your home as collateral for a loan, and you can’t repay, you could lose your home. (For more information, see the new brochure published jointly by the FDIC and nine other federal agencies entitled Putting Your Home on the Loan Line Is Risky Business, available on the FDIC’s Web site at www.fdic.gov/consumers/consumer/index.html.)

Janet Kincaid, FDIC Senior Consumer Affairs Officer, points to yet another reason to shop for a loan before you shop for a car: “Knowing what your spending limit is and sticking to it permits you to focus only on the vehicles within that range,” she says. “This also helps you avoid taking on more debt than you are comfortable with in the long run.”

Also consider getting pre-approved for a loan, meaning a lender evaluates your creditworthiness and explains your loan options and likely costs before you buy a car. “Getting pre-approved doesn’t mean you have a loan in hand but it does give you the benefit of knowing what you can afford and what it will cost you in the way of a loan,” Kincaid explains. “You’ll also know you won’t be surprised with news that you’ve been denied credit or charged a higher rate due to your credit record.” (Consumer advocates also suggest that you not tell the dealer if you’ve been pre-approved elsewhere for a auto loan until after you’ve negotiated the best price on a car. Some dealers may be less flexible on the price of the vehicle if it’s clear that the dealership won’t be earning money on a financing an auto loan.

After you know what’s available in the marketplace, including the interest rates, consider learning what the dealers are offering by reading their advertisements, making phone calls or checking the Internet. Find out if only certain models are eligible for zero-percent financing from the dealer or if a manufacturer’s rebate isn’t available if you opt for zero-percent financing. Having this information helps you make a good decision about financing when you’re face-to-face with a sales person or finance officer at the dealership. For example, “In some situations, it may be best to accept the dealer’s rebate and pass up the zero-percent financing in favor of a loan from a bank that does charge interest,” says Creamean. “You’ll have to do the math and decide what is best for you auto loan quote online or from your local bank.”

Tags:   auto loan quotes · auto loan quotes online · shop for auto loan quotesNo Comments