Car Financing Advice

Most people research nearly every aspect of a new or used car purchase prior to heading to our showroom. In fact, 6 out of 10 customers do. Learning all about your choice; makes, models, colors, interior fabrics, and how fast it is. But few research with the same intensity the financing of this major purchase. In fact, most Americans do not even check their credit reports before heading to the showroom. A new study from Americans Well-informed on Automobile Retailing Economics, reveals that 3 out of 4 consumers do not research financing options before making what is, quite possibly, the second largest purchase of their lives. Next time you’re considering purchasing a new or used vehicle, consider the following:

Determine what you can afford

 If you haven’t already done it, now is the time to create a budget for your purchase. When trying to determine a comfortable monthly car payment, be sure to adjust other costs as well including insurance, gas and maintenance costs might be different than what you’re paying now, for example.

Learn what affects your finance charge

Vehicle financiers use a number of factors to determine the finance rate they will offer you. Typically, they review your credit score, which is based on an automated analysis of your credit history. Other factors that may affect the financing offer include: the price of the vehicle you would like to purchase, the availability of manufacturer incentives, the amount of your down payment, your debt repayment options, and the length of the finance contract. The rate offered to you may be negotiable.

Review your credit report

This way, you will know what creditors will see before they do. This will give you an opportunity to try to correct any errors on your report, and to know if you will be considered a good credit risk.  

Educate yourself

Learn the difference between leasing and buying. Know the meaning of terms like “APR,” “Guaranteed Auto Protection” and fixed versus variable rate financing.

Research your options

Knowing what financing options are available to you will put you in the best decisionmaking seat. Call your bank or credit union and talk to your Ed Bozarth Chevrolet Business Manager. The current vehicle financing system is intensely competitive, so us dealers and other financing sources have every incentive to offer you a competitive rate or risk you going elsewhere. In the end, however, whether you finance through your dealer or elsewhere, there typically are no penalties to refinance if you’re not satisfied.

Focus on the overall package

Make a list of pro’s and con’s for every option, including how long you’ll be paying, the total amount you’ll pay over time, how much cash or trade in value can be put toward a down payment, the APR, and any manufacturer incentive programs. In the end, be sure to consider the whole package offered, and not just the monthly payment.