Before you start the hunt for a new car, one smart thing to do is get pre approved for your loan. When you are pre approved and shopping at a car lot, you are in a better position to negotiate.
It’s pretty easy to get pre approved for a car loan with credit unions, banks or online even no matter what your credit rating. When you do get pre approved it gives you a lot of benefits like better interest rate, helps you set a realistic budget, simplify the dealership experience, and like I mentioned, negotiate more effectively.
Once you are pre approved, you can set that budget for your car purchase by using an auto loan calculator. Just add in the loan factors such as down payment, trade in amount, your interest rate, total loan amount, and about 10% for taxes and such. The loan calculator will give you a general idea of where you should stick to when it comes to a total price, and don’t forget to include insurance and maintenance in your budget.
Don’t Forget to Check Dealership Offers
A lot of times auto dealers get a bad rap – just like us insurance agents =/
But we all aren’t bad – a lot of times they want you to get a great deal, as much as they want the sale. So don’t ignore financing offers, and especially the manufacturers incentives because they come from the dealership. A lot of times dealerships can negotiate a better interest rate then even your pre approval from the bank or credit union. Rebates, cash back and other incentives may be worth having them check.