Buying a new car is an exciting experience. It’s easy to get caught up in the excitement of buying that new car and forget all about the money you are spending on it. But let’s not forget one of the most important elements of making this purchase – financing! Yes, it can be stressful if you don’t know what you are doing when it comes to car loans. Today we’re giving you a guide to getting the best possible car loan rate.
Check your credit score
The first step is to check your current credit score. This way you’ll know what interest rate you qualify for before you even go shopping. You can get a copy of your credit score and history from a reputable online source Look at all the little details of your credit history to make sure there are no errors – because if there are, it can have a big impact on your credit score.
Get pre-approved for a loan
It makes sense to get pre-approved for a loan before you go car shopping. That way there are no surprises when it comes time to negotiate the price. You know exactly how much money you have available to spend, so it gives you the power in your negotiations with the dealer. You can even wait until you find a car that catches your eye and then get pre-approved to help your negotiating power.
Shop around for the best rates
Now it’s time to shop around for a loan rate. There are many lenders on the market offering great rates and if you haven’t checked with more than one of them, then chances are you won’t get the most competitive rate. Do your homework when it comes to interest rates so that when you do finally decide on a car, you can be excited about how low the monthly payments will be. One option is to get car finance with Driva, an online platform that partners with more than 30 lenders to ensure that you’re getting the best rate possible.
Don’t forget add-on’s
When you crack open your pre-approved loan, make sure to look for any add-on’s the lender may have included. The best rate in the world can be quickly killed by a high number of add-ons from the lender. If you find any, don’t be afraid to say no and keep shopping around until you find a lender that doesn’t include them.
Budget for all costs involved
Finally, don’t forget that there are more costs involved than just the car itself. You also need to budget for registration and insurance as well as any potential repairs or maintenance that may come up. A good rule of thumb is to not let your car costs exceed 10% of your annual income. This way you don’t break the bank and you still have money for other necessities like food and rent!
Be sure to remember these steps when it’s time for you to find a car loan – if not, you could end up paying more than you need to. As long as you do your research and shop around then it’s not hard to find a lender that can give you competitive rates and terms. So follow our guide and save yourself some money!
