Frequently Asked Questions About Auto Financing
When shopping for a new or used vehicle there are many different things that you have to consider. For most people, one of the most important and least exciting is auto financing. Getting the loan you need to purchase your vehicle can be a challenge if you have never done it before. Fortunately, there are options out there that will help make it faster and easier than you could imagine. The following are general questions and answers about auto financing that should apply to all situations. If you need specific details, you will want to reach out directly to the financing team you are working with.
Do Car Dealerships Offer Auto Financing?
Yes. Some car dealerships will be able to secure financing for your vehicle. Most dealerships will get you financed by taking all of your information and sending it to multiple different lenders that they work with. The lenders will then offer to fulfil the loan at specific terms. Whichever lender has the best terms is the one that you will want to choose.
Other dealerships will offer direct financing. This is where they will provide the loan for the vehicle themselves, and then you make payments directly to the dealership. While this can be convenient, you will not be getting competing loan offers so you may not get the best rates.
Can I Get a Car Loan Through My Bank or Credit Union?
Absolutely. If you have a good relationship with your local bank or credit union, it is a good idea to apply for a car loan through them. If you have great credit, this is often one of the best ways to get a loan because your bank will want to give you discounted terms for being a loyal customer. If your credit is less than perfect, however, they often do not have the best rates available. When this is the case, it can make sense to apply through them, but you will want to apply through other locations as well to make sure you are getting the right loan.
Can I Get Financed For a Car if I Have Bad Credit?
Yes. It is a little more difficult, but there are companies that actually specialize in getting people with bad credit or no credit the car loans they need. Working with a car loan broker that has experience with bad credit loans will help get you the best terms possible.
How Can I Estimate What my Interest Rate Will Be?
There are a variety of auto loan calculators that you can use that will help you to determine this. You will need to know the total financed amount of the vehicle, your estimated interest rate, and how long you want to finance it for.
Do I Need a Cosigner for an Auto Loan?
If you have a low credit score, or you have little to no credit history, then having a cosigner can be very helpful. Just make sure you make all your payments or the cosigner will be responsible for any money that is due.
Is a Down Payment Required for a Car Loan?
It is always best to have a down payment when buying a car. This can come in the form of a cash payment, or you can trade in an older vehicle and use that money as the down payment. If you have no way to come up with the money, however, it is possible to get an auto loan with zero down.