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5 Important things to do before you apply for the Car Loan

Applying for a car loan? Confused about How to get a car loan Car Loan is the second biggest loan after Home Loan. Go ahead and read on the blog to clear all the related queries.

1.) Analyze your Budget:

When you walk into Car a dealer showroom he will ask you, “What is your monthly budget? And this is a very obvious question whose answer you should know before applying for the loan.

The best way to know the monthly payment is to know the new/used car price before calculating the monthly payment of the car.

It is to analyze how much you can afford in reality and once you know your Car price you can use the finance calculator to help you find the monthly instalments. Car loans can be given in 3, 4, 5 and 6 years of terms.

2.) Check the Credit score:

A credit score plays a major role in paying your car loans. Higher your credit score lowers the car loan rate you get and save your money. Always make sure that your credit score is accurate which is based on your credit reports. You can easily check your credit score online.

People having poor credit scores will qualify for higher car loan rates and vice-versa. So, you can wait for the credit score to improve and reach a high credit score.

3.) Pre-Approval Car Loan:

You can easily apply for a car loan online and also through your local bank.

Check out the different car loans with other banks including the bank in which you already have an account.

You receive a confirmation mail once you are eligible for applying for a loan.

Even if you have a bad credit score, you can still get a pre-approval for the loan but your rate of interest will be higher in that case.

Credit Score helps to determine the type of loan you are eligible for. You have to qualify the minimum criteria of credit score depending on the company providing the finance.

4.) Apply for a loan:

You should apply for a loan within a 2-week process so that your credit score may decrease slightly and helps to decrease the negative impact. FICO score shopping time period is of 14 days so that all the inquiries placed during this will be considered as one query thus reduce the negative score.

5.) Choose your Car:

Once you are done with your pre-approval process, you can focus on the car which you want to buy. 

From this blog, you will end up knowing that applying for the car loan and getting approval for the same is not an easy task.

Checking your credit scores, getting approval takes time and needs a lot of research before applying for a loan.

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Car Buying Guide 2020

Budget lookup is the first step when it comes to buying a car. Don’t spend much time on researching for the cars online or with the dealers.       

Want to grab the best deal online then go ahead and check out the car buying guide:

Tips for Buying a New Car:

Excited to buy a new car and one should not be stressed about it. So, buying a car is the most stressful thing which comes second after the buying of a home.

Salesperson always takes advantage of an uneducated shopper. On average a person buys a car after about every 3 years and negotiates with the dealers.

Car dealers are very professional when it comes to car sales and don’t expect that you are winning the game when you know about the rules. Rule no. 1 for car buying is do your homework before you rush to a dealer.

If you can negotiate a fair profit on a new car then you are gaining profit in the car buying process.

There are many other aspects in the car buying process where the dealer can advantage of knowledge about the car.

New Dealerships always have strong competition with each other         

1.) Vehicle Research

The first step of buying a car is knowing what you want in a car and when you know what you want then it becomes a difficult job for a salesperson to convince to upgrade your need.

It becomes easier to match your needs when you come up with your needs in your mind.

Always focus on your primary need so that salesperson doesn’t take any advantage of wavering minds about a car and its features.

Filter your needs whether you want a car for daily commuting to your workplace, want to drive occasionally, need a pickup truck or need a minivan for a growing family.

Once you figure out the purpose of buying a car then the main things you should consider are:

a) Transmission:

Having a stick shift in your car is not that important. When we talk about the transmission then you can always get a used car on a better price with a stick shift. Sellers should motivate the buyers by offering low prices as buyers are very less.

Only 3 % of manual transmission cars are sold in the U.S and if you buy a car with manual transmission then you have to pay as most of the sports cars consist of a stick shift.

b) Engine:

An engine of a car can determine how fast and efficiently you can drive a car. Cars consisting of more cylinders will have more power and low fuel efficiency.

Choose a car with a small engine whenever you want to save money on a car. But if want more power then go for a car with a bigger engine.

2.) Car Pricing:

Research for the car price online and use it to calculate the market value of the car you want to buy. When you contact a dealer with complete information then you can easily negotiate for the right price.

As we know that price guidelines include features such as engine type, trim level, navigation system and whether a vehicle is a four-wheeler or not. So always keep attention on mileage as the average annual mileage of a car is 12000 miles approximately.

3.) Dealer Invoice

Always check the dealer invoice to know about the dealer invoice price is not the exact price of the new car or truck.

As we know that dealers get incentives, cash rewards, and bonuses when new vehicles are sold out which is the right time for them to earn huge profit.

4.) Leasing vs Purchasing:

Leasing provides a long term contract with a buying option at the end of the contract. When leasing a car then don’t get its ownership or equity until and unless you buy the vehicle with great discounts. A leased car is never owned by you as you have to return it at the end.

Whereas, in a conventional purchase you own the vehicle and you can keep the after finishing the last installment.