A car is one of the biggest purchases you will make and, if you’re like most people, you will need to obtain financing for it. Many people feel overwhelmed and bewildered by the process of getting a loan for a new vehicle. Some people, for example, may worry that they won’t qualify for a loan because of a poor credit rating, while others may be confused by the various financial terms, such as APR and fixed rate financing. To relieve some of that stress, Ghent Motors of Greely Co has provided a few quick tips to keep in mind when financing your new vehicle purchase.
Bad or No Credit?
Credit problems are one of the biggest concerns people have when they are looking at ways of financing their new vehicle. It can be especially hard to obtain a loan from a bank or financial institution if you have a poor credit rating or, as is often the case with young drivers, when you have no credit history. Car dealerships tend to be far more forgiving of a less-than-stellar credit history and they will often be able to offer better terms for bad credit financing than a bank would. Even better is the fact that dealer financing gives you the opportunity to start rebuilding your credit today.
APR? Fixed rate? Variable rate?
Financial terms and conditions don’t exactly make for exciting reading, but you should understand what those terms mean in order to get the best loan possible. APR or Annual Percentage Rate is the annual interest rate that you will have to pay on the unpaid portion of your loan. The rate can be either fixed or variable. A fixed rate means your interest rate is locked in and never changes, meaning you will have a pretty clear idea of how much you can expect to pay in interest over the course of your loan. A variable rate, by contrast, means your interest rate is tied to changing market rates. While a variable rate is less predictable, it can be cheaper if market rates go down.
What to expect?
Most people want some idea of what to expect in terms of what they can afford before they actually visit a dealership. A good idea is to use a used car loan calculator that you can find online. Such a calculator will give you at least a ballpark figure of the amount of financing that you may be able to get before you actually start shopping around for a new vehicle.
The best way of finding the auto loan that works for you, however, is by heading to your Greeley, CO dealership and talking to their financing department directly. There you will be able to learn about the financing options that are available and whether you qualify for any special offers that may make your car loan even more affordable.