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.
Loans before car searching
A good way to know for sure what type of interest rate you qualify for is to get approved for a loan before you even set foot on the car lot. If someone shows up with an approved loan first, then dealers try and sell them extra things to try and make a little bit of money. Dealers like to sell different types of insurance, window etchings or even disability. Many dealers tell the customers that they can only get their loans with extra add-ons, although this is illegal.
Don’t sign anything that says loan approval is a condition of the sale
The Times article mentions a tactic called the “yo-yo.” Buyers can get their cars and leave just to get an annoying phone call just a little later saying the loan didn’t go through and needs to be changed so it is a higher rate. If you get the loan before you do anything, this could be avoided. Bankrate.com suggests you gets financing from the dealer before other things continues. You may have to wait a couple of days longer than before, but it is worth it.
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
