Everyone likes the Internet. We love how convenient it is to shop online because it's quick and easy to buy anything, even big things like cars. If you want to buy a car, all you have to do is go to Ebay Automotive. There, you'll find thousands of cars you can bid on.
You can also buy a car from a lot of other websites. Every car dealership in the world seems to have their own website, and there are also sites like cars.com, usedcars.com, and newcars.com that are used by many dealerships. So it's easy to buy a car on the Internet. What about my car insurance?
You'll find that just as easy, if not easier, than looking for a place to buy a car online. Every car insurance company has its own website, and there are also a lot of websites for generic auto loan brokers. Many will tell you that they can guarantee you the lowest interest rate and that it's easy to get insurance through them.
But a lot of people don't know that the interest rates on online loans are usually higher than those on loans you get in person.
You're right. Online car loans will cost you more than if you talked to someone on the phone or went to their office in person.
Why would it cost more to get an auto loan online? I'm glad you asked. Most studies done by the auto insurance business show that people who apply for loans online are more likely to have bad credit.
Because of this, the interest rate on online auto loans is higher to make up for the risk the insurance company is taking. That doesn't mean you can't find a good rate for your auto loan online, but a local broker is more likely to give you a better rate.
You might get a better rate on your auto loan from your local Credit Union, Bank, or even the auto dealer's preferred loan company. It's always a good idea to look around online and then go to your local options to compare financing options.
Keep in mind that buying a car is one of the most important things you will buy. You will be stuck with the loan you get for your car for at least a couple of years, so look around for the best deal before you commit to anyone.
You will be amazed by how many different choices you have. One lender may offer interest rates of about 7.5 percent, while others may offer rates of 2 percent or even 0 percent. Why do different lenders offer auto loans with such different terms?
Again, I'm glad you asked. Competition is just one of the things that affects what an auto loan company gives you. Each company does its own research to figure out what kinds of loans are high risk and what kinds are low risk. For example, if you buy a red car in Pennsylvania, your auto insurance will be more expensive than if you bought a white or blue car.
Studies have shown that they pay out more claims to people with red cars than to people with other colours of cars. One agent I talked to said that they might get more tickets. The police pay more attention to red cars.
No matter why, it shows that there are many things that affect how much you will pay for an auto loan. Rates for online loans are affected by the fact that more people who apply for auto loans online have bad credit than those who apply for loans offline.
I hope this article has helped you and will encourage you to shop around for auto insurance before you buy it. Make sure you get the best deal you can. Also, ask the insurance broker what factors affect your loan's rate. It might make you rethink the type or colour of car you want to buy.
