Car Loan - Tips Can Help Drive Smart Loan Deals
Written by: Alan Luong
Many new car buyers will appreciate the latest automotive trends
expected to take shape in 2006 and beyond. A greater variety of
downsized, fuel-efficient SUVs will be available. New vehicle
safety features like tire pressure monitors will reach the
market. And sales promotions like last summer's employee
discount campaign are expected to set the stage for year-round,
no-haggle vehicle pricing.
But a less-publicized automotive trend - rising interest rates -
will make 0-percent car loans a rare breed in 2006.
Increasingly, consumers will need to comparison shop for their
car loans before they go to buy, just as they do for the
According to Bankrate.com, interest rates on new car loans rose
steadily throughout 2005 and the pattern is expected to continue
into 2006. The difference of just two percentage points on your
APR can either save or cost you more than $1,400 over the life
of a typical loan.
"Many consumers do not realize that they have other options for
financing their car, outside of the dealership," said Brian
Reed, vice president of Capital One Auto Finance. "There are
some great options for consumers to finance their car on a
direct basis, versus relying on the dealer to provide that
service for you."
Because education is the key to getting the best deal when
financing a car, Capital One Auto Finance offers prospective car
buyers the following helpful tips:
Set a realistic budget. Choose a vehicle that won't overextend
you financially. A general rule of thumb is that no more than 15
percent to 20 percent of your total monthly budget should go
toward all your car-related expenses.
Verify your credit record. Order a copy of your credit report to
ensure it's accurate and in good shape. Correct any errors
before applying for a loan.
Comparison shop for loans. Check out credit unions, banks and
online lenders to see what rates are available in the market, so
that you know a competitive rate when you see one. Visit Web
sites such as www.bankrate.com and
Arrive with financing in your pocket. Having approved,
no-obligation financing in hand gives you a competitive
advantage when you go to buy, giving you the power of a cash
buyer. If the dealer offers a better loan rate, you can take it
with no penalty.
Approach your purchase as three transactions. It's best to treat
each part of the purchase separately: 1) financing; 2) trade-in;
and 3) vehicle purchase. This will simplify the process and
maximize your negotiating opportunities.
Match length of loan to expected length of ownership. Select
your loan term based on how long you plan to own the vehicle.
Buyers who take out longer-term loans can find themselves
"upside down" on their loan (owing more money on the car than
it's worth in trade).
Review your financing terms carefully. Make sure you know your
interest rate, monthly payment, amount you are financing, the
length of your loan and your trade-in value.
"If car buyers would spend just a fraction of the time
researching their auto loan as they do the latest features on
their new car, they'd be surprised at how much money they could
save," said Reed of Capital One.
For more information about loan, please visit
http://www.dezeinfo.com, which is a loan site with a lot of
useful loan information on many different types of loan, and
many useful loan tips to help you to avoid loan scam.
About the author:
Alan is the site owner of http://www.dezeinfo.com/. A loan site
with a lot of useful information on many different types of
loan, and useful loan tips to help loan searchers to avoid scam.
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