The financial reform bill that was signed into law this month included an auto dealer exemption. Auto lending regulation is canceled out by the auto dealers exemption making it so many can be deceived when purchasing cars. If you are thinking about getting your first car, these are the things you have to know first. Before getting auto financing, you’ll also want to research.
Car payments down with more interest
According to AOL Autos, most dealerships make their money through auto financing, not auto sales. Car dealers ask their customers what kind of payment they want, not the car loan rate of interest they’re looking for. That info that is received is how the rate of interest is determined by the dealership. An rate of interest one or two points lower could conserve a car buyer hundreds or thousands of dollars over the life of the car loan. Be careful as a buyer about how you get your car loan.
Get your credit score before learning about interest rate deals
Bankrate.com reports that you will get an rate of interest from a dealer that gets wholesale interest rates from other people. Dealers mark up those rates by up to 3 percentage points. Some people don’t know what kind of rate of interest they qualify for and will end up with a higher one than they need because of that. You need to know what interest rates you are able to get.
Get approved for a loan before going to the dealership
It helps a lot when you’re approved for a loan before you get your car. If someone shows up with an approved loan first, then dealers try and sell them additional things to try and make just a little bit of money. Some things they make an effort to sell are window etchings, disability, or other kinds of insurance. Although it isn’t really legal, dealers will imply that some add-ons are required to keep the loan.
Don’t sign anything that says loan approval is a condition of the sale
This is called “yo-yo” by the Times article There could be a higher rate later on that you have to change to when your dealer calls to say your deal didn’t go through. If you get the loan before you do anything, this could be avoided. If not, Bankrate.com says the buyer should ask the dealer to get finance approval from the lender first. It may mean a couple of additional days before driving away with new wheels, but it could be worth the wait.
AOL Auto
autos.aol.com/article/car-finance-interest-data/
Bankrate.com
bankrate.com/finance/auto/3-tips-on-getting-a-car-loan-at-the-dealer.aspx
The New York Times
nytimes.com/2010/07/17/your-money/17money.html
