Discover if your cheap auto loan is too expensive

Discover if your cheap auto loan is too expensive.

Complacency is the enemy of progress. If we never want to improve, if we are always happy with what we have then we will never have anything better. Of course if you are happy with your auto loan and it is the best you can get at this time then you would be foolish to change. But is your current car loan really the best you can find? We think not. In fact we, I, would be very surprised if you don’t get a better A.P.R rate and lower pre-payment fees if you refinance with another car loan company. The current financial situation although precarious for investors it is ironically not a bad time to refinance. Governments are currently insuring bank loans and actually incentivizing the contracting of loans. If you make the right choices you could come out of the refinance operation with serious savings. That’s what you call a stimulus package.

So how can you find out if your auto loan is too expensive. Well step 1 is to find out how much you are paying now. Often people don’t even know what A.P.R they are paying on their current car loan. Of course the A.P.R is just part of the story, you need to know how long the loan is for. Most of the interest rate of a loan is setup to be paid in the first years of the loan. If you have only a short time for your loan to finish it will probably not be worth it. Still it is always worth checking, it is free. It is also worth getting a printout of any prepayment fees, management fees or any other expense linked to your current car loan.

Next step is to check your credit score. This is free and it does not affect your credit score as some believe. There is a whole lot of misinformation on credit scores often spread by car loan dealers that prefer you to be in ignorance. Once you are armed with your credit score, your current A.P.R and any other car loan related fee you are ready to shop around for your new car loan.

The quickest and cheapest way to get quality quotes for your new car loan is to shop online. Here is where step 1 comes into play. Most banks and lending companies will make an effort to improve your current deal. For two main reasons, 1) they get another client and the subsequent profit and 2) it’s good publicity. We suggest you apply in one of the many online car loan websites that allow you to search at many lending companies at once.

Step 3, you choose the right car loan from all the quotes you will receive in your email. This is probably the most important step. You need to make sure your new car loan is really cheaper and not just a gimmick. Check the interest rate, the final cost of the loan and any fees or penalties linked to it.

And presto, you can start thinking on how to spend or save the money you have just made.