Ask These Questions When Applying For Car Financing

Going into the car dealership to buy a car will involve meeting various types of role players in the car buying process

. Each personality serves a role in the car buying process. First, you will come across and interact with the car salesperson. To handle the salesperson, it will behoove you to have a game plan so that you will be better prepared to handle the car salesperson's tactics. Next, if you choose to purchase the car you will need to prepare yourself for the finance manager, if you choose to finance the car through the dealership. Always keep in mind that all the people at the car dealership serves a specific role in trying to make the highest profit from your car purchase. The car salesperson will do and say anything to persuade you to purchase the car. The finance manager will convince you that the terms and rates on the auto loan are the best. To prepare yourself for what to assume in the car financing, you should ask the following questions before you make a deal:

1. What is the interest rate of the auto loan?

The interest rate is the most crucial factor to a great purchase. You can ask the dealer what the APR is when you are comparing loans. Ask the salesperson how they figure their APR, keep in mind many lender have different ways to figure rates. This will help you know exactly what they are figuring in their loan cost.

2. Are there any penalties and fees associated with the car loan?

Take precaution because many car dealers add hidden fees within the loan. Perform due diligence in finding out every fee that will be associated with the loan. Question the finance manager if there are any penalties and fees for paying off the auto loan prematurely. This is crucial if you decide to refinance your car loan in the future, and it is best to avoid any penalties for paying off the loan earlier.

3. Is this the final answer on the car financing deal?

The dealership's financing department can let you know that the deal is completed, but then tell you the next day that the deal did not go through for various possible reasons. If this happens, they will have partnered with another lender that has higher interest rates and additional fees associated with the loan. As a result, it is crucial that you are aware of this tactic and remember to always make sure that your deal is final and complete before you leave the dealership.

4. Are there any more costs, such as credit insurance?

The car dealer may offer additional insurances such as credit life and credit disability policies to generate additional revenue from a car purchase. Make sure you get all the details for one of these extras before you agree and compare the policy with others out there.

Finding out the solutions to these four questions will help you with your auto loan and put together you better for the car financing process.

by: Sarah Leonis

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