What to Look for in an Auto Loan

When you know What to Look for in an Auto Loan, you can get a sweet ride like this for less over your term

Photo via IFCAR (public domain)

Did you know that getting a new car loan is often more flexible than a used car loan? The market for new cars is incredibly competitive, and manufacturers are trying to entice customers to purchase their vehicles as much as possible. While a used car is generally cheaper, they do come with some significant disadvantages, such as poor warranties and less flexibility for their loans.

Why New Car Loans Are Beneficial

Wondering what to look for in an auto loan? Here’s the first thing you should note: there are a lot of companies that extend their loans to as much as 75 months. Additionally, they often provide coupons with percentage points. Additionally, they are more flexible with their finance. This is mainly because a new car price is set and non-negotiable, and it is a lot more expensive than a used car as well.

Used car loans are almost always 60 months in length. Additionally, there tend to be very few incentives available. Additionally, they tend to offer much higher interest rates on their finance. Dealers like Dodge and Saab offer very low interest rates for qualifying customers if they purchase a new car, sometimes as low as 3.6%.

How to Get the Best Term

In order to make sure that you get the best possible deal, you need to work closely with your dealer, while also doing your own research. You have to look into existing offers, and what types of incentives are out there. For instance, if you make a bigger down payment, you could also lower your APR.

Everybody has a unique personal financial situation, and you need to understand your own in order to get a good loan. You could go to a third party financer, like a credit union, as well. You need to think, in other words, about the options that are out there before you decide which one to go for. Knowledge is power, as they say, and having knowledge about your options makes it more likely that you find the one most suitable to your needs.

You could, for instance, find a dealer that will match your down payment. This may sound like a very interesting option because it means your loan amount is much lower. However, it is common in those situations for the loan interest rate to go up (so the dealer can earn their money back). So you then need to calculate whether you will actually end up paying back more by having your down payment matched.

When you know the options that are out there, you will be in a much better position to negotiate with your dealer as well. This has the potential to save you thousands of dollars, and since new vehicles are expensive, any discount is a good discount. As you can see, there is more to think about than just whether you want a new car or a used car. While some people think a new car is out of reach for them, this may not be the case. And although new cars devaluate quickly, they may still be a very viable option for you.