Doing some simple research can help you get a better deal on a new car loan or refinance the one you already have. In the long run, you can save both time and money by getting the right information ahead of time.
Find out what your FICO score is and what else is on your credit report. The FICO score is made up of different ratings, like how much debt you have, if you pay your bills on time, and so on. Every lender uses this number as part of their approval process, and it will have a big effect on whether or not you get a loan and, if you do, what kind of deal you get.
You can get up-to-date copies of your credit report from the three major reporting services:
Equifax: PO Box 740241, Atlanta, GA 30374 http://www.equifax.com
Experian: PO Box 2002, Allen, TX 75013 http://www.experian.com
Transunion's address is PO Box 2000, Chester, PA 19022 http://www.transunion.com
Next, don't think that the best deal is always the one with the lowest interest rate. A lot of dealers offer loans with no interest, especially right before a new model comes out. In some situations, a cash rebate may be better than a loan with no interest.
For instance, if you choose a 4% loan (36 months) with a $2000 cash rebate, your payment may be lower than if you chose a 0% loan with no rebate.
Before you go shopping for a new car, it's a good idea to find out if you can get financing. You'll know how much you can afford and have a better idea of how much you should spend on your new car.
This also gives you a better chance of getting a good deal from the dealer. Part of their deals depend on whether or not you use their financing. If you have other ways to pay for the car, you might be able to get a better deal if you don't use their financing.
Before you agree to dealer financing, make sure you do the math both ways to see which offer is best. In some cases, it can even make sense to get financing from the dealer and then refinance with your own lender soon after. This usually costs money, and some agreements may not let you refinance, so if you're thinking about it, make sure to read the offer carefully.
Lastly, make sure you think about the pros and cons of both leasing and buying. In some situations, the tax benefits of leasing can make it a better deal than buying.
Before making a purchase, do your research. This will save you time and money and give you the satisfaction of knowing you got the best deal possible.
