One of the most significant financial agreements most Americans will enter besides a mortgage is a car loan. This makes it essential to carefully consider every option and understand precisely what you are signing up for right from the start. Here’s a look at how you can compare car loans and choose the one that’s best suited for you.
Start with This Checklist
Before you head to the dealership, get a pre-approval from your bank or credit union. This will give you negotiating power and help you save money in the long run.
Established brands often have their own financial institution and deals. But, you will have to buy from dealers or their extensive system of networks. Instead, consider getting a loan offer directly from a financing company.
Figure out your loan’s total cost. You can do this once you choose between getting a loan with a lower monthly premium but higher lifetime interest charges, or a loan with a higher monthly premium but lower lifetime interest charges. The latter will help you save more money, but the former will make repayments easier for you.
Check on Early Repayment Penalties
The amount of money you make can increase significantly in the course of a few years. If you estimate that you can pay off your loan early, you should check the fine print for penalties or ask your lender before signing.
Shop Around
Instead of letting your credit dip every time a potential lender checks your credit, narrow down your options and do it all at once. This will make it easier to get a different loan if you need one.
Use the Better Business Bureau (BBB)
When it comes to money, doing your homework before you sign on the dotted line is the best way to safeguard yourself. Check and be sure that the company you’re about to enter into a multi-year contract with doesn’t have too many complaints. The easiest way to do this with small or large companies is to call the Better Business Bureau (BBB) or check online.
