Organizing Vehicle Financing

Probably one of the single most difficult, or stress inducing aspects of purchasing any new, used, or leased vehicle is financing. Organizing the necessary financing can be an extremely nerve wracking experience for just about anyone. Simply put, the reason for this is that there are so many different aspects to getting a vehicle financed that no one can really know how to go about and doing it on their own anymore. Typically, what a majority of people seem to do is go to a car dealer, cross their fingers, and hope that the in-house financing that the dealer uses is going to approve them. While this may work for the majority of people, there is a better way to get things done.

• Credit Rating. Needless to say, your credit rating is going to play a huge role in not just what type of car you are going to be able to purchase, but whether you can even purchase one at all. By law, a person is allowed to get a free copy of their credit report each year, so if you have not done this yet then you should get a copy prior to purchasing any car. This is going to enable you to operate on the same page as lenders, and help save you time.
• Vehicle Type. The type of vehicle that you are trying to purchase is going to play a role in what type or level of financing you are going to qualify for. Prior to purchasing, or applying for financing, do some homework on the different vehicle types that are available. Decide on which one that you want, and research what the blue book new value and resale value is for each.
• Down Payment. The size of the down payment that you are able to make is going to dramatically affect your financing. If you are able to put between 25% and 50% of the total purchase price down, you are more likely to get the financing you want, not to mention you are going to have lower car payments.
• Lender. There are different types of lenders that you can go with. Many people go with the financial arms of the car dealerships they are dealing with, but you can also utilize private banks and credit unions and even private individuals. Prior to signing on the dotted line, shop around and see what you can find.
• Loan Length. Length of a loan is going to play a larger role than you think. Often a car dealer is going to try and get you to sign for a loan that takes as long as possible to repay. Often this is going to be presented as a service towards you to help lower the cost of the monthly payments, but what it is really doing is making money for the bank or financial institution through the interest rates. The lower the length then the higher the payments, but the quicker you get the loan repaid.