How To Get The Best Car Loans With Little Effort

How to get the best car loans?  It's not as difficult as you might think! 

Getting a car loan is something most of us don't think about until we're already at the dealership drooling over the car we decided we must have. 

Taking the time to do some advance planning can save you big bucks. 

It makes sense if you think about it to put as much effort into getting the best deal on your financing as you put into trying to get the car!

Let's look at some of the most important ways to make sure you end up with a car loan that you can live with.

Seriously, there's nothing really hard about it. If you follow this simple list of things to do and not do, you should end up with the best car loan out there!

Credit history/credit report is king. While the rules are a little more lax when it comes to financing a car than say a house, your credit history is going to help you or hurt you. Before even thinking about buying a car, get a copy of your credit history and while you're about that, also get your credit score. This will help you know where you stand in terms of getting the best profile from lenders, such as A or A-, etc. You can obtain your credit information from AnnualcreditReport.com, Equifax, Experian and TransUnion.

But How to get the BEST loan. Now that you know your credit score and your credit history, do your homework. Look online as they have been having the best deals with the lowest interest rates....but also check out traditional lenders and credit unions. (Credit unions often offer 1-1.5% lower rates than banks). If you apply for a loan or multiple loans just make sure you do it all within a 2-week period of buying the car as it can drive your credit score down.

Loan in hand is worth 2 in bush. If you find the loan that you want, and you know the general ballpark figure for the car you want, you now have leverage in your hot little hand. You have the money you need and all you need to do is find the right car and negotiate the right price. Use car loan calculators online such as at Edmunds.com to calculate what your monthly payment will be but look at the bottom line. How much you will pay over what amount of time and what will the total amount of your loan be? That's where you want to focus your attention and save money. By extending the loan out over more years, the banks are just making free money......all to reduce your monthly payment.

Read it and weep. Make sure before you ever sign a contract that you at the very least read ALL of it. It is usually best to just ask to take the contract home. That way you can be sure that there were no loopholes such as "contingencies" which is an open window where a dealer can NOT give you what he or she promised or an interest rate can be inserted that's variable, something you do not want unless you can afford to pay the highest APR that it could go up to someday.

Do the math. Calculate if buying a car with a cash rebate is better than low dealer financing. You just have to run the numbers both ways and figure out which one to the cent is going to give you the most money back. Also calculate the bottom line on your contract and make sure your calculations match what the contract says. If different at all, make sure you ask why.

The "N" word is not a bad word. Don't be afraid to negotiate. If you have a preapproved car loan and it's at a great rate that you're happy with, don't fail to mention this to the other lenders you've investigated or to the dealership. See if they'll match your loan and if not, then nothing's lost. Stick with the loan that benefits YOU the most!

• Credit score above 680 makes you a "prime borrower"
• Credit score below 680 makes you a "subprime borrower"
• Credit scores below 550 probably won't allow you to buy a car
• Most lenders won't give out a loan to anyone making less than $1600/month
• Moving within the last 6 months can hurt you if you apply for a loan too soon
• Having a job for less than 6 months may also hurt you when trying to get a loan
• Check out myautoloan.com for on-line information on car loans for used cars
  
• Up2Drive.com also is a great source if buying a used car or from a private party
  

Buying a car is another one of those things in life that's a huge deal for most of us. It's a major purchase and having the best deal going in is the surest way to come out feeling like you won something rather than feeling like you just got "had".

Take the time to make sure your credit score is where it should be. Make sure your credit report is free of blemishes and if there are black marks, fix them before applying for that loan.

If your credit isn't up to snuff, you may have to deal with higher payments for 2-3 years. The good news is if you show consistent good credit habits from that moment on, your score and your report will recover in that length of time. Buying a car and paying for it on time is one of the best and quickest way to repair bad credit.

Always look for the best possible deal and figure the possibilities several different ways. How much will the payment come down if you put this much down? How much will it come down with this other amount down?

Think in terms of short-term if you can. Buying a car with cash is great but if you have to pay for it over time, keep it to the shortest term that you can possibly afford and get it over with. Extending out your payments to more years just gives the banks and lenders free money!

Take your time and shop for your loan options as much as you shop for the car itself and you'll come out a winner!