Auto Loan Providers - Auto Loan Financing Information
Things you should know before making your final auto loan decision...
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Doing your homework in advance is the key to a successful automobile purchase.
Go to:
Direct lending qualifications
Financing through an auto dealer
Indirect (Dealer) lending qualifications
Zero percent financing
Get the lowest interest rate available
Down payment requirements
Watch for the "extras" on your final contract
Loan contract funding switch
Do all the research about lending qualifications, auto dealers, auto loan rate, your credit rating, different types of loan financing , online direct lenders, and know about your auto loan and the particular automobile you are interested in purchasing ahead of time. Make your auto car buying experience one that gives you the ultimate feeling of satisfaction and a job well done.
 Decide
how much you want to and can afford to spend on the loan financing for the purchase of an automobile. The amount you can spend will be relative to the amount you can borrow depending on your credit rating and the online direct lenders lending qualifications.
Should you be required to have a down payment to get your auto loan, know what resources you have prior to visiting the auto dealer. Just in case it will be necessary, take the amount you want to spend and allow yourself approximately 20% of that amount for a down payment.
A down payment requirement for an auto loan is relevant to your current credit rating situation.
Use MyFICO.com to get your credit rating and to know what the auto loan lenders and auto dealers will be seeing when they review your credit history to give you an auto loan rate.
If need be, and can be, put off your purchase for 30 to 60 days to clean up your credit of inaccurate, untrue, false information
to help improve your credit rating.
Do your research on the automobile choice you are considering for:
Compare your auto choice to other makes and models in the same category.
High demand cars have the least amount of negotiating power.
Newer, more expensive, is not always better.
Weigh: value and need -vs- beauty and status
When purchasing a used car know the retail/wholesale value
When purchasing a new car know the True Market Value™
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 Apply for a direct loan : The approval from a online direct lender makes you a "cash" buyer. As a cash buyer you NEVER have to release your Social Security Number to the Auto Dealer during negotiations. As a cash buyer you ALWAYS should request a "One-Pay Contract".
Purchase - Direct Lending Qualifications:
Basic Lending Qualifications for cash voucher auto shopping:
$1,800 Individual monthly gross income
$2,000 Joint combined monthly gross income
All applicants must:
be 18 years of age
be a resident of the US
have a valid driver's license
if bankruptcy is applicable it must be discharged
If an online direct lender doesn't give you an approval, "indirect" auto dealer financing can be a good option if you are completely aware of your auto financing alternatives.
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Auto Financing through an auto dealer : Indirect lending is another term used for Auto Dealer financing. The underwriting criteria set up by Direct Lenders are much more stringent than those available to dealers from indirect lenders. Remember when using auto dealer loan financing to keep the price of the automobile your top priority. Make the auto dealer aware of how much money you want to spend on a particular automobile, not how much of a monthly payment you afford. Don't let the auto dealer sales representative negotiate the auto loan on monthly payments.
Find the automobile you are interested in and don't close out your negotiations on that vehicle until you have:
Test driven the automobile
Taken steps to receive a lemon check if necessary
Requested maintenance records
Requested previous accident history or check for yourself the Vehicle History Report
Don't be intimidated by auto dealer sales pressure, set your price + or – 10% before you begin your negotiations, and stick to your guns. You are ultimately looking for your best price without robbing the auto dealer, who, after all is said and done, has to make a profit too.
Once the price has been determined, and you feel comfortable with it then discuss the monthly payment. Lender interest rate charges are determined by your credit worthiness. Always request that the very best interest rate be located for you. The auto dealer, on most occasions, will accept the first lender that approves you based on your lending qualifications to close the deal more quickly. Request the dealer to search all auto lenders to find the best rate available to you. When there is one approval, there usually is another lender who will also make that same call.
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Purchase - Indirect Lending Qualifications :
Basic Lending Qualifications for Alternative/Dealer financing:
$1,400 monthly gross income.
18 years of age / valid driver's license / resident US
No repossessions in past year unless included in bankruptcy
Discharged Bankruptcy (Back to top)
Watch for the "extras" on your final contract : Don't agree to any extras from your auto dealer until you have compared "after market" values for the same service. Throwing it in as part of the contract, thinking you are saving "out-of-pocket" costs later, is one of the biggest mistakes a consumer makes with an auto dealer.
Extended Warranty - for a free comparison check: CLICK HERE
Gap Insurance - for a free comparison check: CLICK HERE
Rust Proofing
Road Safety Value Packages
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Zero Percent Financing : Do you think you have great credit and want to be part of the “0%” Interest financing? Have you thought about the ultimate effect?
The term on a 0% rate will almost never be longer than 24 months. What happens when that term is over and you still have a balance remaining?
A very big factor to consider when weighing the decision of choosing 0% Interest is: WILL you have it paid off in the required amount of time? Refinancing rates on a used vehicle are never as low as New Car Rates, therefore, getting a guaranteed rate for a longer term right up front could ultimately be your cheapest route to take.
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Get the lowest interest rate available : Make sure the auto loan rate of interest the
online direct lender or the auto
dealer has given you is the lowest rate available to you?
If you do not believe it is, then you should do some comparison shopping. The indirect lender will quote the auto dealer a “buy rate” which is the rate the lender is actually charging to fund the auto loan. Many times, however, the lender will also supply the auto dealer with a “sell rate”, which gives the dealer the opportunity to make backend points on the auto loan.
Example: Loan is quoted by auto loan lender at 12% buy rate - 14% sell rate. If the auto dealer can sell you the car for $20,000 at an interest rate of 14%, the auto dealer just made an extra $280 on your loan.
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Down Payment Requirements : Is the auto dealer requiring an extremely large down payment from you? Did you get a Retail Value on the automobile you wish to purchase to make sure they are not selling it to you above market value?
One of the biggest dealer maneuvers is to increase the sales price over the market price and then require the customer to pay the difference as a down payment. The lender, in most cases, will allow financing on the vehicle up to 115/120% of the actual market value of the car.
The bottom line to remember is: Be sure that you are required to pay the down payment because of your past credit experience and NOT because the dealer is hoping to make a killing on the sale.
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Auto Loan Contract Funding Switch : Are you signing off on a half prepared contact that hasn't been professionally submitted to an auto lender for guaranteed approval?
Be alert to the old "Bate & Switch". Know that your auto loan financing is guaranteed prior to driving away in your new car, and Don't be called back once you are driving the car only to hear that the original financing didn't fly, but for a slightly higher interest rate they definitely have you done.
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Trade-in your current Automobile : Value your automobile for retail and trade-in through one of the online sites like kbb.com , or call your local bank. Remember to be honest with yourself and picture your automobiles value without personal sentiment involved. Consider the automobile's physical condition, maintenance and mechanical upkeep, and the overall cleanliness.
Don't let your trade-in be part of the negotiation on the new purchase of your automobile; keep the true values of each separate. Your vehicle value to the dealer should be worth approximately 15% less than its professionally rated trade-in value.
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