If you’re like most people, you’re looking to get the best deal you can on your new or used car purchase. And while the purchase price is certainly important to doing that, overlooking key components like higher interest rates, added fees and penalties on your financing can lead to spending hundreds or thousands more than you initially believed you would. Knowing beforehand the steps to acquiring the best deal on your used car financing can give you peace of mind that you’re aren’t wasting your money.
Know Your Credit Score
Before setting out to purchase a used car, it’s important to understand what your credit score is and what you can do to improve it. A credit score includes information on where you live, how you pay your bills, and whether you’ve been sued or have filed for bankruptcy. The information found within that score is one of the biggest determining factors on not only getting a loan but what interest rate you’ll end up paying for it. Once you understand how a great credit score can be the difference between securing your financing at an excellent rate or not getting a loan at all, it only makes sense to do a little detective work into where your credit stands when you know you’ll be needing a loan. The Fair Credit Reporting Act requires the 3 each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. By requesting a free copy of your credit report, you can verify that there are no errors that could end up costing you more. If errors are discovered, the law requires the company who gave the information to the credit bureau to correct it. You can find more about your rights under the Fair Credit Reporting Act on the Federal Trade Commission’s website here.
Don’t Ding That Score
Once you know what your credit score is, it’s important not to lower it before securing financing on that dream car of yours. While it may not make much sense to us, closing newly opened credit card accounts or even your oldest account will give that credit score of yours a ding. In addition to closing accounts, you’ll want to avoid applying for multiple credit cards or loans. So skip that department store offer to save 10% on your purchase by opening a credit card with them and if you do decide to shop around for the best rate on your used car financing, make sure you do it within a 2 week period so you don’t inadvertently lower the credit score you’ve been working so hard to raise or maintain.
Contrary to what you might expect, lenders are not required to give you the best rate you qualify for regardless of your credit score. Shopping around to a variety of banks and credit unions can give you a better idea of what the lowest interest rate available to you really is. As mentioned above, you’ll want to make sure you only shop around within a 2 week timeframe to insure you don’t hurt your credit score. When comparing offers from different lenders, make sure you look at more than just the interest they charge. Keep an eye out for hidden fees, prepayment penalties and that the loan is for the same amount of time since paying longer on a loan can add more to the overall cost.
Understand Your Financing
Walking into a dealership with financing already secured isn’t absolutely necessary for buying a used car but you might want to consider doing just that if you want to get the best deal. Unlike Broadmoor Motors Hastings, many used car dealerships add points to your financing in order to make more money on the sale of the vehicle. With the average markup of interest being 1.8%, that small amount can make a big difference in your long term cost of the car. Make sure you understand all aspects of your financing before signing on the dotted line including interest rate, length of the loan and any unnecessary fees that might have been added to the terms. Financing contracts are binding and you’ll find yourself with little recourse after the fact. Working with a trusted, reputable dealership who offer transparent financing with many local credit unions and banks like Broadmoor Motors Hastings can help alleviate any undo risks and concerns.
Buying a vehicle and securing financing for it doesn’t have to be a painful process. At Broadmoor Motors Hastings, we specialize in finding the right used minivan, truck, SUV or car to fit your personal or business needs, all while giving you the best deal we can on both your purchase and trade in. Our family has been in the car business for over 60 years and continues to be family owned and operated in both our Hastings and Caledonia locations with financing available to those who qualify, and we will find you the right vehicle to fit both your budget and your needs.
Let Broadmoor Motors Hastings save you time and money when buying your next quality, Pre-Owned Car or Work Truck and on your next Car Rental. Whether you need a short term car rental, long term car rental, a replacement while your vehicle is getting serviced or simply need to replace your car, minivan, truck or SUV with a great used vehicle, we can help you out. Broadmoor Motors Hastings is here for all your Car Rental, Car Sales, and Auto Service needs in the greater Barry County area, Hastings, Middleville and Caledonia. Give us a call at 269.320.6304 in Hastings or 616.698.9595 in Caledonia to see how we can get you back on the road!