The end result of purchasing a new car should leave you happy and with a sense of completion. During the process, most people experience several emotions, but happiness isn’t typically one of them. The process of purchasing a car can be a stressful ordeal, particularly when it comes to financing.
When it comes to getting a car loan, the frustration can be greatly intensified. Considering most people can find the process confusing, whether to use the dealership or your local bank becomes another major decision. However, the following information explains the loan process and a few secrets for using the dealership when getting car loan approval.
Qualify for a Car Loan
The first step for qualifying for a car loan is to have good credit. When your credit score is in the mid-600s and up, you will have no problem getting approved for a car loan. Anything in the low 600s and below will more than likely have to get secondary financing, which typically has higher interest rates.
When you decide to finance your vehicle, you can do so through the dealership or through a private lender such as your bank or credit union. The major benefit of financing through the dealership is their special interest rates. In most cases, dealerships offer special interests on new vehicles, such as 0% APR. In addition, a growing number of dealerships are offering special interest rates on pre-owned certified vehicles as well. On the other hand, credit unions or local banks have historically offered the most competitive interest rates for used vehicles.
The easiest process for getting affordable auto financing near me in Greeley COis to go through the dealership for financing. The dealership will process the lending application onsite and conduct the closing of the loan as a part of the car buying process. When you use one of the lendersthe dealership has partnered with, everything will be done succinctly in one place.
However, when you use a third party financing source, you will generally have to deal with someone outside of the dealership for the loan portion. In most cases, you will have to fill out an application with the lender, and the check will either be mailed to the dealership or you will have to visit your bank, pick up the check, and take it the dealership to pay for the vehicle.
One of the primary problems with using an outside lender for car loans is that banks will not always lend the entire amount. Since banks use a different valuation system, you may be required to put money down to bring the vehicle’s loan-to-value in line in order to get the vehicle.