5 Car Search Tips to effectively obtain the car you want

New cars are expensive. The only passport to get the best deal is research. You cannot throw your caution to the wind at the time of buying a car especially if you have to have it financed from either a direct lender or a broker. Most of the Americans trade in their car rolling over their previous debt into a new car loan. Paying off a loan for a car you no longer use does not sound affordable at all.

You can take out an auto loan from a direct lender, which is more sort of a personal loan paid off over a period of time. Unlike financing from a dealership, you do not have to worry about add-ons and dive into the hassle of choosing between multiple financing methods – HP and PCP. You simply put down an upfront payment of 10% of your car’s value and more, probably up to 20%, in case you are looking to take out bad credit auto loans with guaranteed approval.

You may have to abide by so many restrictions when you prefer to choose a dealer to a direct lender.

5 car search tips to obtain a car of your desire

Bear in mind the following tips while shopping for a car of your own interest:

• Get pre-approved for a loan

While you need as little as 10% of your car’s value as a down payment, it does not mean that you can get the nod for your car loan. Even a larger deposit size cannot help you qualify for a loan if you cannot prove your repaying capacity. A lender will check your credit score and income sources to ensure that you can repay the debt. Regardless of the size of loan-to-value, you should be able to prove your repaying capacity.

A dealer cannot be comfortable if you do not have a pre-approved letter from a lender. Your airy promises will not work here. Remember that a dealer knows that you, as a customer, can quickly fall into love with limited and luxurious models with sunroofs and leather seats. When you officially put in the loan application, you are turned down.

No car dealer would want to spend time with any buyer who has not got a pre-approved letter for a loan. Further, preapproval lets you pick the best deal because you can get quotes from different lenders without affecting your credit score. Though you cannot get to know actual interest rates, the quote will help you know which lender is more likely to offer you affordable interest rates.

Do not forget to check your credit score because the quote is stated without a credit check. Actual rates will certainly be higher than the quote rates and even higher when your credit score is bad. Try to improve your credit score first.

• What is the purpose of buying a car?

At the time of buying a car, you should know why you need it. For instance, you can manage with a secondhand car if you do not need it daily. If you are looking to buy it for your business purpose, you will probably find PCP better than auto loans or HP. Whether you will use a new car or an old car or take out a car loan or dealership financing, it all depends on your purpose and, of course, your budget.

• Keep your shopping simple

Do not need to tell too much to a car dealer. At a time, focus on one thing. When you go to the showroom, you should focus on the price. Keep in mind a couple of cars and ask their price so a car dealer does not get to know immediately which one you want to buy. Car dealers are always keen on knowing whether you want to trade in or whether you are looking to get your car financed from a dealership.

You should never answer these questions because otherwise, you can get trapped in an expensive deal. They might raise interest rates to make extra money, or they can deceptively make a lower bid for your trade-in car. So, make sure you keep it simple. Once you have talked about prices, you can move to trade-in or other aspects.

• Stop buying add-ons

Whether you are getting your car financed from a car dealer or a private lender, car dealers have a lot of ways to make money. Once the car is finalized, your car dealer will come to the next thing such as extending warranties. They could even offer you protection plans in exchange for extra money, such as gap insurance, paint protection plans, and the like.

They could offer you some accessories to make your driving experience even better, but such add-ons should technically be avoided. Prices quickly add up. This will unnecessarily put pressure on your budget. You should simply avoid these add-ons. However, if they have some benefits to offer that can bring relaxation in insurance premiums, you might consider them, but this is extremely rare. The warranty extension is what attracts many people, but you can get that later, just before your warranty period comes to an end.

• Avoid extending the loan term

There are some lenders that may allow you to opt for a longer repayment period as it lowers the size of installment. Unfortunately, it will add up to the total cost of the loan. This is because interest will accrue on unpaid balances. The longer the repayment period, the higher the total interest will be. Bear in mind that your inexpensive car can prove to be an expensive one if you choose to pay more on interest.

You should not go for a loan with more than three years period. It is likely that you have to opt for a longer term when your income sources are not good. If that is the case, you have no option. If you are looking to buy with the help of a car loan broker, they can help you pick the best deal that easily aligns with your budget.

The final word

In order to get the best car, you should know the purpose of buying it because it can influence your decision to buy a new car or an old car. You should get a pre-approved letter from a lender so you know what interest rates you are likely to get offered when you formally fill in the form.

Make sure you keep things simple in the showroom and do not give your car dealer a chance to make money out of your deal.