Jason Lanier asked:




If you don’t know what you’re doing, you can get smoked at a car dealership. Most people don’t understand the process that a dealership goes through when comparing quotes and approvals for your auto loan. Understanding this and knowing how you can use the same process to your advantage with an online auto loan, can save you thousands of dollars in excess finance charges and fees.

This is how it works…

When you go into a dealership to get approved for a car loan, the dealer submits your credit application, along with information about the vehicle that you’re purchasing, to several lenders. Each lender responds with an answer that either approves your loan or not, with varying stipulations (if you have bad credit). The dealer then searches through the responses and picks the approval that will make the dealer the MOST money.

How do dealers make money on my loan or auto loan rates?

Believe it or not, a dealership gets incentives for sending your loan through some companies. Finance companies will even pay cash money to finance managers that steer business their way. For example, one company when I was a finance manager, would give me a $500.00 Wal-Mart gift card if I sent them 20 customers a month. Not a bad deal, huh? So do you think that when I could give a customer a better rate with another company, or send them to the more expensive company that was padding my wallet, who do you think the deal went to? You guessed it and that’s one of the reasons that I left the car business.

Also, dealers make money by inflating your interest rate. If you get approved at let’s say, 12%, the dealer can add 3 percentage points to your loan. Some finance companies allow the dealer to add as much as 6 percentage points. So if you walk out paying 15% interest, when you could have paid 12%, think of how much money you would save if you were able to cut the middle man out of your auto loan rate.

The only way around it is to REVERSE the system an put it to work for you.

You can submit your information to lending services online that will cut out the middle man. Buy initiating the financing end of your car purchase online, you can get better auto loan rates, and save money on excess finance charges that you didn’t have to pay to begin with. It’s only dealer profit that stands in the way of you getting better rates and a better approval that is more affordable. When there is no one that has a commission check at stake, it’s amazing at how much better of a deal you can get.

Carmen

RJ mommy asked:


Hi, We have situation right now. My husband purchased his USED car on 08/22/2008. Car dealership told us to not going to other bank to get loan because they have better rate. He told us used car with 5.45% for 60 month. It is very good rate and we decided to use dealership loan.

Few days later, my husband went back to pick up some stuff that dealer ordered to my husband. Same sales guy told my husband that loan % was mistaken. It was not 5.45%, it is 5.99%.

We already finished Retail Installment sales contract(yellow long contract paper) same day when we purchased. Dealer signed and it was all done. My husband driving everyday for his commute.

Is anyway we can keep the rate? or we should change to higher rare whatever dealership said? If that case do we should re-do contract again?

thank you

We took advice#2 and another advice from one of friend who working major car company headquarter. I told to the dealer sales guy “Contract is deal, and the was done. If you want change the rate we will void the contract and you could pick up the car or take to the small claim court is another idea that I don’t really want do.”

If he wanted change the rate, he have to re-do all the paper work with same car price that he listing $1000 cheaper after sold theat car with same VIN . He is not supposed to listing ad with my husband car (VIN)with cheaper amount to just get customer that is against law. He said he is fine with 5.45%, it’s better for him to loose $300 instead of $1000. Thanks for advice!

Derrick

Christopher Whitcomb asked:




Nowadays as more and more cars are introduced the around the globe, everyone has a desire to own one. Individuals even do not mind buying a used car, if they get one in a good condition. The Modern scenario is such that most of them buy cars or most expensive commodities on credit. Even while buying used cars, you can avail loans if you can make the necessary payments. However, there are numerous financial organizations, which provide used car loans. Henceforth, it is imperative that we should study the used car auto loan rate that is offered by them for making the eventual decision.

When it comes to the number of sources from where you can get such loans, you will be glad to know that there are many of them. When someone wishes to get loans for buying used cars, the most important point that should be considered is getting them on the lowest used car auto loan rate available. Most financial organizations usually offer loans at a very low interest rate. However, they have hidden costs involved, which eventually make you pay more than what you acquired.

Apart from taking care of the used car auto loan rate, there are some other points on which you should pay attention. These auto loans should have a shorter payment period. As the used car usually costs less, it is advisable to take only a part of the price as loan and pay the rest upfront. Usually when used cars are bought from any dealers, they offer lowest available used car auto loan rate. It is seen that usually finance companies lower the rate for the auto loans, if the down payment is a good percentage of the price of the car.

The best way to know which financial companies provide used car auto loans at the lowest rates is to search on the web. Apart from the information of the rates, you can also find the reputation of these companies with a single click. Again, you also have the option of comparing offers of most companies providing used car loans. By making comparative studies, one can make the eventual decision without any trouble. You will usually get an opportunity to make an application on the internet without running off to the nearest branch.

Marvin

LARRY asked:


to a application with good credit rating if you have good credit you can offord monthly paymnets of $590.00, how much will you borrow from E-loan. what is the interest you will pay onthis loan

Tamara

Justcurious asked:


I am trying to get an auto loan. I have about a 600 credit score and nothing really bad on my credit but nothing really high in an amount. I have a co signer who has about a 740 credit score but not really any high loans on their credit either.. I have great income. Its kinda like my co signer has the good credit and i have the great income. Can we submit the auto loan with my co sogner has the primary and myself as the secondary so we can get the best rate and stay away from a high apr? Possibly even a lease.

Bernice

Carrie Reeder asked:




Bouncing back after a recent bankruptcy is challenging, but possible. To begin with, you will need to rebuild credit, which involves opening new accounts. If you need a new vehicle, financing a car following a bankruptcy may be a smart move. Auto loans are easy to qualify for. Thus, you can get approved with horrible credit.

How to Avoid High Interest Rates?

If your bankruptcy was recently discharged, high interest rates may be unavoidable. Yet, there are ways to purchase a new car without paying several percentage points above the current average. Sadly, there are some people paying interest rates 18% or more.

To avoid high fees, postpone financing a new or used vehicle. Instead, attempt to get a secured credit card. Make timely payment for about a year. In time, your credit score will improve, making it possible to obtain an auto loan with a rate of 9 or 10 percent.

Choose a Used Vehicle to Finance

If you are hoping to improve credit by financing a vehicle, opt to finance a small amount. Thus, even with a high interest rate, you can receive affordable payments. Another tactic involves taking charge of the car buying process. Instead of allowing the dealership to determine monthly payments and loan term, inform the dealership of how much you are willing to pay. Your ideal monthly payment should include finance fees.

Use a Subprime Auto Loan Lender

After a bankruptcy, subprime lenders are helpful with helping people secure auto loan financing. Some lenders are shady. On the other hand, a large number of lenders understand your circumstances and attempt to offer affordable solutions. If using an auto loan broker, you have the opportunity to receive various quotes from different subprime lenders. This is ideal for making comparisons and choosing the best loan.

Apply for Loan with a Co-signer

If you are hoping to obtain an auto loan with a low interest rate, it may help to apply for the loan using a co-signer. Co-signers or co-borrowers become responsible for the loan if you are unable to pay. If your co-signer has exceptional credit, you may qualify for a low interest rate on your auto loan.

Jeffrey

Carrie Reeder asked:




Finding a bad credit auto lender is simple. When buying a new or used car, the auto dealer may offer bad credit financing, or refer you to a good lender. Even so, car buyers should consider arranging their own financing. Bad credit auto loans are tricky, and some lenders will take advantage of you. For this matter, it helps to choose a good lender and know your available options.

Check Your Personal Credit Report

Before applying for an auto loan, bad credit applicants should request a copy of their personal credit report. Review the report, and take note of your FICO score. Upon submitting your application, the auto lender will base approval on your credit score and credit history. Additionally, checking your report prior to applying reveals your credit standing. Some auto lenders classify sub prime borrowers as persons with scores below 640. On the other hand, another lender may qualify a borrower with the same score for prime rates.

Compare Different Auto Loan Rates

Making comparisons is a surefire way to get approved and find the best auto loan rate. Auto lenders qualify applicants for varying rates. If you have bad credit, failing to shop around and obtain multiple rates will cost you more money. For example, a dealer’s finance company may charge an interest rate of 10%, whereas a credit union may charge the same applicant 8.5%. The percentage difference could save you $50 – $70 a month.

The best way to compare rates is to visit an online auto loan broker site. Request a no-obligation quote, and wait for a response. Each quote received will include details such as qualifying interest rate, loan approval amount, loan term, and estimated monthly payment. Review the quotes carefully, and pick the lender that offers an affordable deal.

Make Efforts to Boost Low Credit Score

Improving your credit score doesn’t happen overnight. However, if an auto lender recognizes improved credit habits, they are more inclined to approve a bad credit loan application. Before applying for a car loan, practice submitting regular payments to creditors. Furthermore, attempt to reduce your overall debt ratio.

Gabriel

Chris Goodman asked:




Regardless of your credit history, everyone is looking for the lowest possible rate on a car loan. There are many factors that go into determining the ultimate rate you will be changed by the lender/dealer, but your credit score is one of the largest factors. In addition to score, lenders are looking at actual history in profile to determine your “credit worthiness” or better said how you have paid your bills in the past. They are also looking at the collateral you are purchasing and the down payment you are providing.

Since credit score is the main factor a lender looks at, here is a breakdown of how Experian, one of the largest credit reporting agencies, breaks down the different credit categories:

Super Prime = 740 and above
Prime = 680-739
Non-Prime = 620-679
Sub-Prime = 550-619
Deep Sub-Prime = below 550

Your credit category will determine how easy or hard it is for you to get a car loan. If you fall into the Sub Prime or Deep Sub Prime tiers, you are having the hardest time finding a car loan. Those whose credit falls in the top three are still getting financing all be it harder and more expensive than it was a year ago.

The internet opens up many options for consumers will all types of credit. There are benefits to going online and securing your auto financing regardless of the credit category you are currently in. Some of those benefits include data security, the ease of applying from the comfort of your own home, better negotiation power with the dealer since if you get your car loan before heading to the dealership, you are viewed as a cash buyer.

You owe it to yourself to explore the internet as an option for your car finance needs. Many lenders offer finance products for the purchase of a vehicle from a dealer, products allowing you to refinance your existing loan and some even give you the option to finance a vehicle you purchase from another individual. Regardless, getting a car loan online will save you time and money.

Gregory

Benjamin Robert Ehinger asked:




Are you thinking about buying a new or used automobile? Do you want to make sure you get the best auto loan rates you possibly can for your purchase? There are some tricks to getting a good rate on your auto loan. You need to arm yourself with these tips so that you can get the best possible deal and rate on your car or truck.

First, you need to understand that if you are purchasing a used vehicle, you can check with your bank to see if they will give you a better rate than the financial institution that the dealership uses. Plus if they give you a better rate you can take it back to the dealership and see if they will make a counter offer. This is a great way to get a lower rate.

Second, shop dealerships and find a couple of vehicles you like that are in the same class. This would be if you are looking for a coupe go to a Chevrolet, Ford, Toyota, and a few other dealerships and find a couple at each that is in the same price range and work out a deal. Then, you can use the best deal as leverage with the vehicle that you really want.

Third, you should try to avoid any auto loan that is over 7% on used and over 3% on new right now. There are plenty of places that will finance you at 0% or very close to 0% on a new vehicle and at 5% to 7% on a used vehicle. There is no need to pay more and you should refuse to pay more than this or you are not getting the best auto loan rates.

Dale

rjon17469 asked:


I’m currently 22 and am a senior in college (although I’m going for one more year and then possibly grad school). I would like the possibility of being able to buy a house in two to three years, and therefore am looking for ways to improve my credit. I opened a credit card ~9 months ago with a $3,000 limit. Currently the limit on it is $4,500, all payments have been on time, and the balance is my previous month’s purchases (around $100).

In reading, many people recommend having either one or two revolving credit lines, and one or two fixed credit lines, for a total of three lines of credit. My credit card is one revolving credit line. I’m curious if taking out say a four year auto loan and making payments on time would substantially improve my credit score three years from now. The loan amount would likely be $7,000 to $8,000, giving monthly payments of around or under $200, which I can realistically afford. I’ve been paying my own college tuition and rent since the second semester of my freshman year of college, so I somewhat have of a grasp of my expenses.

On a side-note, I’m under the impression that I would be stuck with the interest rate I initially receive. I could refinance, but wouldn’t that close out the line of credit and begin a new line of credit, potentially lowering my score?

The follow-up questions are, would it be in my best interest to open a second credit card for additional feedback on my credit history? Also, I currently have a good amount of student loans, all of which are in deferment until I graduate (if I attend grad school, they will remain in deferment through that period). Do these loans count towards my credit score as fixed lines of credit? Some are federally-funded, while others are through private institutions.

For what it’s worth, Credit Karma reported my credit score at 722 as of a week ago, and TransUnion reported it at 764.

Delores