It’s wise to know what to do and not what to do when buying your first car. This can help you in saving hundreds or even thousands of dollars over the term and conditions of your loan and the life of the vehicle. Ensure that you have done all that is required before you even go to a dealership company. This includes making the right preparations that will guarantee you that you are in a position to leverage the best deal possible. The following are five tips that you can apply when buying a car.
ENSURE THAT YOU ARE PRE APPROVED FOR FINANCING
When you are approved by a financial institution before negotiating with a dealer, you force the dealer to up or match the rate at which your credit union or bank has offered. The approval enables you to have a bargaining power to enable you to negotiate. If you are not armed with a backup plan you might get stuck with whatever the dealer is willing to do
ENSURE THAT YOU DON’T STRING OUT PAYMENTS FOR A LONG PERIOD OF TIME
When you sign into an extended loan, you end up paying a lot much for the vehicle than its original price. Normally people often apply for a longer loan because they want to buy a car that they can afford and practically, anything seems inexpensive when broken over enough payments; this is what make many buyers lose the sight of the car purchase price.
SHOP FOR THE BEST INTEREST RATE
It’s important to understand that the rate on your loan is equally important as the price of the vehicle you want to buy. A deal on a car won’t be good if the immoderate interest rate on your loan is going to increase the aggregate cost of the car. Credits unions normally offer favorable interest rates on loans as compared to the big banks. A dealer might succeed in getting you the best interest rates in a case where the factory incentives gives low or zero percent financing but you may not know it until you go with a quote from your financial institutions. A dealer is a middle man so if you want to save its wise you go direct to the source.
ENSURE THAT YOU KNOW YOUR CREDIT SCORE
There is a relationship between your credit score and the loan you want to secure. The credit score ranges between 300 and 850 and it’s an exact representation of the liability and risk you pose to lenders. Before you even visit a car dealer, you need to know what your credit rating is and how that will affect your financing options. The best way to know your credit score is to visit a major credit tracking company such as Equifax, Trans union or Experian.
IMPROVE YOUR CREDIT SCORE BEFORE BUYING A CAR
Before buying a car, ensure that you have fixed your credit score. A better credit score implies better terms and lower interest rates. One of the fastest way to boost your credit score is to clear your down credit card debt, this is because credit card utilization means a lot to credit agencies.