Common Auto Financing Mistakes to Avoid

If you’re looking for auto finance Sacramento can offer several excellent options for you, including major banks, your local credit union and, of course, the auto dealerships themselves.  For an auto loan Sacramento also has many excellent brokers who have immediate access to many of these resources all under one roof.  But before you head out and start filling out auto loan applications, it will save you time and possibly money if you follow make a checklist of things to remember in order to minimize the chance of mistakes.

1. Make sure you check out all your options. If you spend a little bit of time researching the rates and terms between banks, credit unions and dealerships, you may find some striking differences.  Some credit unions have excellent benefits and incentives for their members that banks just can’t compete with.  Also, dealerships have tremendous leverage with banks due to the sheer volume of business they do with them.  The same is true for brokers.  Investigate all these sources, take notes and make comparisons.
2. Don’t make your decision based on interest rate alone. Finding a great interest rate is exciting, but make sure you read the fine print.  What are the terms?  What is the down payment?  For an auto loan Sacramento has some great rates, but be sure to know if you are willing to accept all the terms and conditions of the deal.
3. Don’t make an emotional decision. You may be in love with the car, and it might even be in your price range, but have you done any comparison shopping?  Have you checked other similar models online to make sure the sale price is not too high?  You may want to do a price check on Kelly Blue Book’s website, www.kbb.com.
4. Be aware of your own credit rating. They say that knowledge is power.  That is certainly true when you are applying for a loan of any kind.  For auto finance Sacramento is just like any other city, you need to have a very good score to qualify for the best rates.  If you don’t have good credit, be prepared to accept a higher rate on your loan. 
5. Take time to consider the offer.  If you’re at the dealership when you apply for your auto loan, you may feel a lot of pressure to go ahead and close the deal right there and then.  Don’t be afraid to walk away from the table and sleep on it if you have to.  You may realize that you’ve got better options somewhere else.
6. Make the selling price your top priority. It’s very easy to fall into the trap of “buying based on payments”.  Car dealers are notorious for selling on payments because they know if they can get you to agree on a monthly payment you’ll be less focused on the price or the interest rate – which is where they make all their money.
7. Get prequalified for a loan before shopping for the car. If you are pre-qualified for auto finance Sacramento becomes your car buying playground.  You are now really in the driver’s seat because you can walk into any dealership and tell them that you’re a cash buyer. 
8. Don’t be afraid to say “No”.  It can be difficult to walk away from a negotiation, especially if you’ve already invested hours in trying to find a car and make a deal.  But if you consider that the car and the payments are going to be with you for many years, it’s well worth it to take a chance on repeating the process two or three times to make sure that you get the car and auto loan you can live with.
9. Consider the length of the loan. It’s important to remember that the longer you are making payments on the car, the more you’ll pay in interest to the banks.  Also, the best and lowest auto finance rates are usually for the shortest term loans.
10. Don’t buy more car than you can comfortably afford.  This goes back to the principle of not making an emotional buying decision.  Make a commitment to yourself that you will stay within your budget and it will save you from a lot of potential unhappiness down the road.  There’s nothing like the stress of not being able to make your monthly payment or having to fear that your vehicle will be repossessed.

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