18

Feb

The 3 Most Expensive Mistakes People Make On Their New Car Auto Loan

Posted by admin  Published in Auto Repair Loans
Tip! Sometimes if you can find a good co-signer to help with a bad credit auto loan, this might be your ticket into that new car. The co-signer has to have great credit because they are responsible for making the loan payments if you don’t.

When you’re shopping for a new car auto loan, there are some things that you need to know. Many people make mistakes when they buy a new car, and these mistakes can end up being very expensive. This article names the three most expensive mistakes people make with their new car auto loan so that people can avoid them:

bThey Don’t Evaluate Their Loan Options/b

It is easy to go with a lender you know, possibly even the lender who financed a previous car. However, it’s always best to get several quotes from different companies in order to ensure you’re getting the best interest rate. A higher interest rate could cost you thousands of dollars over the life of the loan. Some websites will even provide you with several quotes from different lenders after you fill out just one application.

Tip! First, you’re paying a very high interest rate at 16.4% APR for an auto loan! I’m going to assume that your statement as to your good credit is accurate.

bTheir Down Payment Is Too Low/b

A low down payment will affect your interest rate if your loan amount is not considerably lower than the appraised value of the car. Lenders calculate your loan-to-value ratio (LTV) to determine their risk in the transaction. A higher LTV will represent a higher risk for the loan company, so they will raise your interest rate. Even if the difference in interest rates is small, a higher interest rate could cost you thousands of dollars over the life of the loan.

bThey Don’t Buy a Warranty/b

The worst thing in the world is to have to pay payments on a car that doesn’t drive. Or, even worse than that, to have to pay auto repairs on a car that you’re also making payments on. Do yourself a favor and invest in a warranty. It could save you a lot of money over the life of your loan.

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Tip! The first step is to find out what your credit situation really looks like. With a credit score, also known as a (FICO score) with a 500 rating it may not be wise to get an auto loan.

Visit Car Loan Sense to view our a target=_blank target=_new href=http://www.carloansense.comRecommended Auto Loan Lenders/a online. Also, visit Car Loan Sense for help finding a a target=_blank target=_new href=http://www.carloansense.com/Getting_a_Good_Interest_Rate_on_Your_Car_Loan.shtmlNew Car Loan with the Lowest Interest Rate/a.

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