While most of the transactions when buying a car occur through car financing, experts suggest that all first-time car buyers be cautious when dealing with auto loan providers. Keep in mind that you’re about to make one of the biggest financial decisions in your life. Take your time and find the best deal.
To help you out, oxfordauto.com shares some of the key questions you should ask your loan provider:
What is the actual interest rate I’m paying for?
A trustworthy auto loan provider should give you a detailed breakdown of your expenses. One way to do this is to compute the annual percentage rate. Do not be deceived with low monthly payments. You should be looking closely at the total amount you’re paying for the whole term. Usually, the payment terms and interest rate will depend on your credit score, so make sure you have a good credit rating, as well.
Are there penalties in my loan? If so, how do I get penalized?
Your loan officer should explain briefly their policy. The problem with some car loan companies is they just simply hand out documents to their applicants or possible clients without discussing the terms and conditions. Ask them about their penalty charges for delayed payments. There should also be clarity on the repossession of the vehicle.
Will you include car insurance?
Some auto loan companies will give you an option to include car insurance in your policy. Be sure to clear this to your car loan provider to avoid discrepancies in the future. If they recommend a car insurance provider, review the policy carefully. Make a thorough comparison from other companies.
When will I know the results of my car loan application?
If your requirements are complete and there are no issues with your credit rating, chances are you’ll get approved right away. The whole approval process should tell something about the auto loan company. Do some research before making an application. Check their credential and read reviews about their services.
Getting the answers to these questions will help you make an informed decision. Again, take all necessary precautions before signing a deal.