When looking to buy a new vehicle, you do not want to jump the gun in applying for an auto loan without considering some important things. Staff that work at car dealers locally here in Evansville, Indiana, have had all kinds of experiences where people don’t consider important things before applying for a car. Be sure to take a few minutes to read and consider the below before you apply.
Let’s jump right into what you should know before you take out a loan
1. Have you narrowed down the right vehicle for you?
- Ask yourself what your lifestyle looks like and whether the vehicle you are interested in is suitable for (where you go and what you do) day in and day out.
- Consider the following: What do you do for a living? Do you use your vehicle for work? How often do you commute from and to work or school? How is the vehicle on gas? Your fuel economy depends on whether you drive in the city or primarily on the highway. What kind of terrain do you generally drive on? Will you need 4×4? Do you need towing capacity for campers or trailers? What kind of technology package are you looking for? Are you happy with a basic tech package or do you want all the updated features such as Apple CarPlay and Google Play, rear backup cameras, and safety indicators? And then there is style, such as choosing the interior, exterior trim style, and then color that most suits you.
2. Do you know your budget?
- Having a specific budget in mind is a great way to go shopping, that way you know you can be at peace of mind with your decision. If you end up with too high of vehicle payments, other areas in your financial life will suffer. Be sure you have some wiggle room in that budget and then start shopping for the style of vehicle you are looking for within that range.
- Be sure if you are going to buy your vehicle at a dealership to plan about $1,000-$3,000 more taxes, fees, warranty options, vehicle protection packages. These are things that are important and anyone who wants to protect their new investment.
3. Have you researched where you are buying it from?
- Where you buy your vehicle can mean everything to your car buying experience. No one wants a bad dealership experience. How can you tell where you should go?
- Google search “car dealers in Evansville reviews”. Google reviews are a really great resource for you to see what other people’s experiences were at that dealership. Look for how they were treated as well as for examples of how the dealership rectified an issue. Every dealership out there will have a few bad reviews so don’t let that deter you from choosing a good one with mostly positive reviews.
4. Have you checked your credit?
- Before you shop for a loan, be sure to check your credit. The better the credit score – the easier and cheaper borrowing can be! With higher scores can come lower interest rates on loans.
- A blemish here or there on a credit report might not matter much, but if you have many combined, it could put some serious dents into one’s ability to get approved from lenders. There are potential errors on your credit report. Be sure to take care when reviewing any errors found within these reports. These could be fraudulent charges that you are able to dispute. This will help boost your credit score.
- A 650 credit score is the minimum most lenders will take for you to be approved for a loan. As long as you are above 650, don’t worry if you have a low credit score. A low number won’t keep you from getting loans, but it can affect what type of interest rates are offered and how much the total loan might be.
5. What are your warranty options?
- Having a warranty saves you a lot of money out of pocket. Vehicles inevitably have issues. When issues occur, you will still have a warranty as manufacturers’ warranties are automatically transferred to the new owner of a vehicle. If you go for a vehicle that is older than five years, a dealership could offer to purchase an extended warranty on your used vehicle. If you are buying new, you will have a manufacturer’s warranty along with the option to purchase an extended warranty.
We hope we have painted a good picture of what to expect in the car buying process before you apply for an auto loan. Use this as a guide for the next time you or someone you know is considering purchasing a new vehicle.