Tips You Can't Do Without
When Shopping for Auto Loan

Title: Auto Loan Buying Tips

Author: Duane Lipham

Article:Have you ever felt like you bought an auto and financed it anddon't really know if you got the right price or financingarrangements after it was all over? Well, don't feel alone.

This is a common experience for many people who make auto purchases.

Guidelines for negotiating the car price can be found elsewhere,but we want to share some helpful tips on getting that vehiclefinanced at the best rates and terms for you.

The first step is to make sure that you negotiate the car'sprice separate from the vehicle financing arrangements. Mostdealers want to lump it all together because they can hide quitea bit of the actual price of the vehicle in the loan contract,and they will usually just try to meet a monthly payment figurethat you can live with rather than disclose all the detailsabout the loan.

Auto Loan Buying Tips

So your work actually should begin before you ever visit thedealer lot. Try to determine beforehand what vehicle(s) you areinterested in buying and become familiar with the average costfor that vehicle, either online or locally. Then make sure thatit will fit your budget. Most financial experts recommend thatyou shouldn't spend more than 10% of your monthly income onvehicle costs, including the loan, gas, repairs, insurance, etc.

Since you now know the price that you want to pay, you need tofind out what the loan will cost, so visit some auto loanwebsites and/or local banks, and apply for an auto loan. Seewhat rates and terms they offer you. Much of that will bedetermined by your credit history. If you can get pre-approvedfor a loan, all the better.

Experts also recommend that you try to put at least 20% of thecar price on the loan as a down payment toward the purchase ofthe vehicle, either in cash or in the trade equity of yourcurrent vehicle. Why? Well, so many people are being put intoloans these days with longer and longer payback periods andlittle down payment and the net result is that if they want totrade that car in within the first year or so they find thatthey actually may owe more on the car than it is even worth. Sousing sound financial decisions beforehand can prevent this fromhappening.

Auto Loan Buying Tips

Now, using all of this information, the price you are willing topay for the vehicle you want, the average loan you can get, andthe best terms that you can get that will fit within yourbudget, you are now ready to visit the dealer, find the vehicleyou have been thinking about and get the deal that will fit yourneeds. Remember to negotiate the price of the vehicle withoutfinancing first. After you settle on the sales price you canthen reveal what finance terms you already have found and see ifthey can beat it.

Auto Loan Buying Tips

Get the particulars in writing too. What is the price for thenew vehicle? What is the trade amount for your old vehicle ifyou have one? If you finance through the dealer, what is theAPR, the total amount financed, the total amount paid at the endof the loan, the total number of payments and the monthlypayment figure itself? If the dealer will not give this clear,concise information, leave and go somewhere else to buy. If theycan compete with your prearranged loan terms, then great. Ifnot, get your auto loan elsewhere.

Auto Loan Buying Tips

A word of caution. Keep it to business. It's exciting to buy anew car and it's also easy to get carried away and buy morevehicle than you need or previously wanted just because it looksso good or has so many features that the dealer will try toconvince you that you can't live without.

Having predeterminedwhat car you want and the price you are willing to pay will keepyou safe in these negotiations but only if you stick to yourguns and don't give in to being upsold.

Using these strategies keeps you in control of the negotiationprocess and keeps you informed all along the way so that you canbe confident that the vehicle and the auto loan you purchase isindeed the deal that you wanted... Auto loan

About the author:Duane Lipham is the senior editor of http://www.loans.dlbws.comwhere you can find free information and advice on getting theright personal, auto, home equity, mortgage, and refinance loanfor your needs.

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