A lot of people rush to get a car loan without thinking too much about it. Certainly, there is some excitement in getting a new car but there are a few car loan tips that should never be disregarded.
The very first thing that should be on your mind is your credit score. It plays an important role in the offer you will get from the dealer or lender. If your score is on the high side, you may get a lower interest rate. It may be worth delaying the purchase of a car for a couple of months to improve your credit score.
Another essential tip is to think about the down payment. A larger down payment may reduce your interest. This happens because the lender gains confidence in your ability to pay back the loan. Amongst all the car loan tips this is the most important one. Keep in mind that a larger upfront payment means lower monthly payments and it will get you into less debt.
Next on the useful tips list is to never walk into a dealership and state that you want to finance your car. When dealers hear that you want to finance a car, they are less likely to negotiate. What you should do is try to negotiate the price before stating how you plan to finance it. Dealers tend to think that it does not make much of a difference on your monthly payments if you get or not a discount of a couple of thousands of dollars. In the long run, it will make a big difference.
Lastly, if you plan to get a car loan, you should always walk into a dealership with your mind firmly set on the model and trim level. One of the best car loan tips is to push back when the dealer tries to upsell or convince you to buy a different car. He is just trying to get rid of his inventory of cars that do not sell well.