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New Car Loans
What You Need to Know About New Car Loans
The Ins and Outs of New Car Loans
The glitz and glamour of buying a new car can soon fall flat when financing becomes a complication. However, taking out loans for new cars is an extremely popular option, as few individuals have the lump sum needed to buy a new vehicle, and fewer people can afford to pay cash. It is vital to check on auto loan rates when considering taking out a loan for a new car. These rates can be checked online with Capital One Auto Finance, Lending Tree, E-Loan and Auto Credit Finders.
Another option is to finance through the car manufacturer; oftentimes these dealerships will offer to provide their own car loans to consumers, and will provide promotions such as 0%APR or financial rebates. Consumers with high credit may want to take these offers into consideration, or may want to accept these offers and then refinance later with a separate automobile finance center (such as the four listed above).
How to Get New Car Loans with Bad Credit
It is extremely important for any individual buying a new car to know his or her credit score before applying for a new loan or other kind of financing. An individual with bad credit who applies for a car loan and gets rejected may find this is damaging to his or her overall credit score. Dealerships and manufacturers may offer deals on new car loans to buyers with high risk credit, but these deals may fall through and/or cost the buyer more in the long run. If it is possible, new car buyers should wait until credit improves (it is good to have credit be at least 600 points) before trying to take out a loan on a new car. It is also recommended to put down at least %20 percent for the car up front. This is because the value of cars tends to depreciate at least %20 percent after the first year, and new cars depreciate even quicker.
The higher a credit score, the more likely a consumer is to get a good new car loan. Scores that are higher than 680 have the best chance at getting good financing from online companies or other accredited financial agencies. Scores below 680 will end up paying higher APR, and scores below 550 will face difficulty finding a sufficient loan from both lenders and financial agencies.
The Benefits of a Large Down Payment
If you can put a large chunk of money down on your car, by all means, do so. The more you put down up front, the easier your loan repayment will be. A large down payment can reduce the amount of your monthly payments and reduce the length of your loan term. This also means that you will be paying less interest.