A car is for many people the second most expensive thing they will own, homes being the first. It pays to know what to look for to ensure that you get the best terms for your auto loan.
You first want to decide whether to buy or lease your car. For most people leasing is best only if you know you will be trading it in in a couple years and will not be driving the car excessively, so that you avoid mileage penalties. Otherwise, it is probably best to buy the car.
Now take a look at yor credit report and ensure that it is accurate. This can have a huge impact on the interest rates that you will qualify for, and will be paying for years, so do what you can to ensure that you get the best available.
When comparing loans, don't fall for low payments spread over a long period. This can result in the loan costing you quite a bit more, particularly if the interest rate is high. You want to pay as much as you can afford each month and have your interest rate as low as possible.
Now, it may be possible to get a great loan from the dealership. You've seen the ads from time to time, offering Tier 1 customers 0% financing. If you qualify, go for it, so long as the interest rate after the term of the 0% is not too high! Otherwise, it may pay off to have a loan arranged before you go to the dealership. A loan you arrange yourself can have a much lower interest rate than the dealership is offering.
Take a look at any penalties that may apply. It can cost you extra to pay off the car in advance, and that is very important to be aware of. What is the grace period? Is the interest rate fixed or variable?
Make sure your financing is taken care of before you take the car home, or you might be stuck with problems you were not prepared for, such as a high down payment, higher interest rates and so forth.
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