When it comes to getting an auto loan, there are several options for you. These options range from getting a loan straight from the selling dealer to going online and finding a lender that is right for you. Below is a summary of the different ways you can secure financing on your next car purchase. You decide which the right solution is for you.
From the Dealer: The most popular way to secure financing for you vehicle is to finance directly with the dealer who sells you the car. There are pros and cons to this choice. One of the most favorable reasons to choose this method is the possibility to get 0% financing and favorable terms. However, what most do not realize is there is a very small percentage of the general population that actually qualify for this type of financing while the majority of us pay a much higher interest rate.
Online Lenders: Finding your next car loan online is a choice that is growing in popularity. Not only is this one of the easiest ways to secure your next car loan but it is the one that gives you the most control over the car buying process. You see, when you go online and secure your financing, the lender gives you a “blank check” that you can then take to the dealer and negotiate more as a cash buyer that one that is in need of the dealers financing.
Neighborhood Banker: Most of us bank with someone right around the corner. However, getting a loan from them is somewhat difficult, especially in the current economy. If you do know someone there in the loan-making business that you can call, you owe it to yourself to try this avenue. There are times when this can be your lowest cost of financing.
Credit Unions: Some of the cheapest car loan rates come from credit unions. They have a very low cost of funds and are able to pass those savings along to their members. Find one in your area that has an open membership that for a small fee, you can join and become a member. They offer many different loan products ranging from car loans to home mortgages.
Buy Here Pay Here: One of the most costly ways to finance your next car is through what is known as a buy-here-pay-here dealer. This is a dealership where you give a large down payment to the dealer and then make weekly or bi-weekly payments directly to them. These loans have super high-interest rates and should only be used as a last resort.
There are many options for just about everyone looking to get a car loan. Do not just settle for the first thing that pops up. Do your homework and you can find a great deal on your next loan. To find out more about car loans and see useful negotiation tips for your next car purchase, visit OpenRoad Lending.