Unfortunately, more and more Americans are having a difficult time making their car payments on time. Although it’s not a significant portion of overall Americans just yet, the statistics don’t lie and people seem to be having a tougher time paying off their car loans.
Since the great recession, the number of subprime car loans has risen, so there are more borrowers that are struggling financially. This is obviously one of the major reasons why people are finding it so tough to pay for their cars.
To help make it easier on you, we will share four excellent tips that you can implement right away to get a great deal on a car loan. If you use the suggestions, your loan will be much more affordable over the long term.
- You Should Keep on Top of Your Credit Reports
In order to qualify for the best car loan possible, you have to make sure everything on your credit report is in good standing.
As an example, let’s say there are five errors on all three of your credit reports from TransUnion, Experian, and Equifax.
If these errors remain, they are going to lower your credit score. So you have to dispute them and take the necessary steps to have them corrected.
Once they are fixed, your credit score will rise and you’ll be able to attain a much lower interest rate for your car loan.
Because of all this, it is advisable to look at your credit record and even consider paying a fee to check your current score.
- Shop around with Multiple Lenders
You’re certainly willing to shop around to get the best vehicle, right? So why not shop around to check out multiple lenders?
Don’t get financing from the first lender to come along. See if you could find a better deal by approaching multiple auto lenders.
By going this route, you’ll be able to avoid paying a higher interest rate. Most people have a tendency to obtain financing at the dealership. But you’re smarter than that, so you’re going to do what’s right and get quotes from multiple lenders so that you can get a better interest rate.
- Choose a Shorter Loan If You Can Afford It
At this point, cars and other motor vehicles have become more and more expensive. And since these vehicles are more expensive, the life of the loan has become that much longer.
As a matter of fact, many people end up financing their new car for seven, eight, or even nine years in total. You can plainly see that even though the monthly payment will be lower with the longer term, you’re also going to pay more money over the long run by paying more interest.
Typically, these seven to nine year loans will have much higher interest rates than a shorter-term loan. It’s in your best interest to try and limit your car loan length as best you can, and if you can keep it to 48 months or less you’ll be much better off.
- Don’t Overextend Yourself
When buying a new car, many people have a belief that they can easily afford the monthly payment. And this is especially true if they happen to get a really good deal on a new car.
So, instead of paying whatever the dealership tells you, work on negotiating instead. Tell them that you would like to get a better deal and do what you can to lower your monthly payment.
If you use these four tips, you’ll have no trouble getting an excellent deal on a new car loan.