Every good shopper knows the importance of comparing prices before you buy anything. The same rule applies to buying a new car. In fact, with prices as high as they are and interest rates going up, now it is even more important to shop around for the best rate on everything.
If you can get your own financing deal, do it
The best way to secure your own financing is to check your credit report for errors and get a copy of your credit score. Keep this with you at all times.
Lenders will want to know your credit score before they can give you a quote on financing terms. The dealership too will want to know your credit score before making any sort of financing offer.
Getting your own financing deal is all about saving money in the long run. Banks and lenders of all sorts are in business to make money and they make money in a number of ways. If you are not a savvy shopper they will try to make as much money as they can from you, but you have control. Keep a good credit record, pay your bills on time and avoid bankruptcy and you will have a pretty good credit score. This is an important step toward securing a good loan.
Dealerships will want to arrange financing for you
Dealerships make financing available to their customers because they can make more money this way. In fact, after you negotiate the price of your car the financing person, who is paid on commission, will try to sell you a number of things you likely do not want, did not ask for and do not need.
Undercoating body spray for one, is a great way for the dealership to make a little extra money off your car purchase. So is the addition of a security system, a new stereo and navigation system. An extended warranty is another great excuse for them tack a little extra on to the cost of your vehicle. Before you know it they have increased the price of your new car by a few thousand dollars, all of which they will gladly provide financing for.
Shopping for your own financing deal is a way of self-preservation
Don’t let the dealer take advantage of you by being your sole banking representative. They are looking to make a profit, nothing wrong with that. You need to be looking to protect your investment, and there is nothing wrong with that.
Do yourself a favor, next time you are in the market for a new car, get your own financing. Then when you walk onto the lot you will know how much new car you can afford and relax knowing it is already paid. All you have to do is decided which one you want.