What are Common Mistakes When Applying for a Car Loan?

You've found that perfect make and model. You've picked out your new trim. You're so close to owning the vehicle of your dreams, but what about financing? There are tons of nuisances that customers may face when seeking auto financing, but with just a little research, you can avoid every one! Learn all about the common mistakes when applying for a car loan, and consider contacting Cashmax for all your loan needs.

Auto Research

When it comes to buying a car, have you done your homework? Before you get behind the wheel of your vehicle, be sure to set your budget and stick to it. Customers need to figure out how much they can afford, including both payments and financing rates. Don't forget to check your credit report and FICO score! Once your budget is set, you're ready to take the next steps.

When you get to the financing stage, consider checking out as many options as possible: credit unions, local banks, even the dealership. Many online resources, such as LendingTree.com and E-Loan.com, will help you compare each option side-by-side, so you can drive away with the best deal possible.

Rookie Mistakes

Many first-time car buyers get swept up in the search for that dream car, but it's important to stay calm and collected. Be aware of pushy salespeople and don't be afraid to leave the dealership. The perfect car will always be waiting, so there's no need to rush. Customers should stand their ground and feel confident in making the best financial decisions possible, even if the salesperson starts pointing out that flashy convertible.

Money Matters

Additionally, there are plenty of loan-specific tips to keep in mind. Here are just a few of our suggestions:

  • Your financing rate is important, but it's only one part of the equation. Keep in mind how much you'll put down in total, and keep an eye on the terms of the loan as well.
  • Low monthly payments are great, but be sure you're not paying excessive interest in exchange for this deal. Look at the APR and length of the loan. Shorter loans are usually the better deal.
  • If the dealership pushes their financing package and you aren't comfortable with the terms, walk away! Dealerships tend to offer a higher rate to make a profit. Shop around for your best option and you'll drive away happy!
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