Auto dealer car loans, the insider secrets.

Auto dealer car loans, the insider secrets.

Buying a car is probably the second most expensive purchase you will make, after your home. You certainly don’t want to get involved in a scam or pay for unnecessary fees and extras. However every year most people don’t get the car loan deals they could if they just did a bit of homework and avoided falling for some basic selling strategies. We are not for one second saying that car dealers financing is suspect or that auto dealer salesmen or dishonest. Most just want to make an honest profit selling quality cars. However it is worth being forewarned in the few cases where your car dealer is not the personification of honesty.

As a rule of thumb it is always better to go to an auto dealer with your own finance. Auto dealers are experts on making you spend money on extras. In many cases auto dealers will make more of a profit on a sale from their finance division than from the actual sale of the car. When you get financing after you have chosen a car you are distracted. Some car dealers include the financing in the negotiating of the car. This is very likely to be counteractive for you best interests.  Here are some tips to help you get a better deal.

1. Let’s start with basics. READ THE LOAN CONTRACT. All of it. It is amazing how easy it is to rephrase or outright change the contents of car loan. On the other hand there might be something you didn’t understand, this is your last chance to understand every detail of your car loan. Don’t be embarrassed to ask questions, that’s his/her job.

2. This tip is included in the previous tip but is worth emphasizing. Check out the terms of the loan contract. If you were told the loan would have a tenure of 56 months, make sure it does. Check the prepayment penalties and make sure there are no hidden extras in your loan.

3. Check the interest rate on your loan. Is it what you were promised, if not why? Make sure the interest is calculated in the way previously advertised.

4. Get your own finance. When you approach a finance company, lay out your credit score, collateral and income before you even start looking at cars you are very likely to get a better price. It is very unlikely that you will get a better price in an auto dealer however there is no harm in getting your best possible deal and asking the finance department of the auto dealer to improve the offer.

5. If you included a trade in with the cal purchase and loan make sure you make out a written statement assuring that the seller will cover the pending costs on the car. It has happened, too often that the seller forgets or chooses not to pay the loan on the trade. Because the trade in is still officially property of the buyer, it could come back to haunt you.