Spend a few minutes online searching for auto loan quotes and you will quickly discover that there is an overwhelming number of options. When dealing with any kind of choice, the first step is to be able to separate the good ones from the bad ones. This isn’t always easy.

Here’s an example. I get a letter almost every week from the bank that holds my home mortgage. They tell me that I can save up to $4000 a year if I refinance. Well, that sounds pretty good to me. I’d like to say $4000 a year. What they don’t tell you is that you have to pay the cost of refinancing the loan. But the worst part is when the loan gets refinanced, it extends back out to 15 years or 30 years. I have 10 years left on my mortgage. If I refinanced it to say $4000 a year, I’d end up with a 15 year loan again. But by the end of the 15 years, I spent a lot more than $4000 in interest.

The moral of the story: be careful and do your due diligence.

The Most Important Secret to Getting Good Auto Loan Quotes

The best way to get a good loan is to be patient. You want to shop around and get as many quotes as you can to increase your chances of finding the sweet deal. However, if you are anxious to get a loan right away or you are sitting in front of the car salesman under lots of pressure, you are likely to make a hasty decision. If you know you want to buy a car, qualify yourself for a loan first before you even set foot on the car lot.

Don’t Live Beyond Your Meanscar-loan-05

This is a no-brainer. Don’t buy more car than you can handle. Don’t just buy a car because the salesman says he can get you a low monthly payment. You should be paying attention to the overall cost of the car, not just the monthly payment.

Try this strategy. Ideally, you want a four-year loan. Five-year loans are really popular, but really they are just a ploy to sell more cars to more people who can’t really afford them. Take the sticker price of the car you want and plug it into a monthly payment calculator at an interest rate that you think you are likely to qualify for. If you can afford the payment, then you need to keep looking for a car that is not so expensive.

The bottom line is you want to start searching for a loan well before you set foot on the car lot to purchase the car. Only in this way are you going to be able to see all the choices that are available to you and ultimately choose one that is the best and most reliable for you.

It’s time to buy a new car and you are worried that will not qualify for a loan. Nowadays, there are lots of options out there allowing almost anyone to get a loan. The caveat is the better credit you have the lower interest rate you can get. And alternatively, if you have bad credit you’ll likely end up with a high interest rate, and therefore paying more money in interest over the term of the loan.

I’ll give you a simple strategy at the end of this article to help you improve your credit rating if you need to do that.

Credit Requirements to Get an Auto Loan

The main requirement to get an auto loan, of course, is to be able to prove that you have enough income to make the monthly payments. The higher your annual income, the bigger loan you can get. And of course, the opposite is true.

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Any disadvantage of getting an auto loan due to low annual income can usually be compensated for by having a larger down payment. If you know that you need to buy a car soon and you don’t make a lot of money, then you may want to consider starting to save up a sizable down payment or barring the down payment from a friend or family member.

A close second behind annual income is your credit rating. A low or bad credit rating may indicate to the lender that you are not trustworthy and could end up defaulting on the loan. However, there is always someone willing to give anyone alone. Getting a loan may not be the problem. However, if you get a loan designed for someone with bad credit, be prepared to pay out the nose and interest.

A Strategy for Improving Your Credit Rating

Here is a simple strategy to improve your credit rating. Find a bank, or a friend or family member, that will loan you $500. Take the $500 and go to another bank and open up a savings account. Now, asked the second bank to also give you a loan for $500. Don’t withdraw the $500 you put in. You want to keep that in there. Take the $500 the second bank lent you and go pay off the $500 loan at the First Bank. Now go to with third bank and bar another $500. Use it to pay off the loan at the second bank. Then, take out the $500 at the second bank and pay off the loan at the third bank. You have now paid everyone off. Check your credit rating in a month or two and you’ll see that your credit rating has gone up. Ideally, you should keep borrowing money and paying it off in this fashion endlessly until your credit rating is prepared.

As you will borrowing money from one bank and paying it back to another bank, you should also be slowly saving up a down payment for your car. Once you have two to $3000 saved up, put it in a savings account. Then, get a small loan from that bank for two to $3000. Open up an account in another bank and deposited there. Keep going on as I mentioned in the previous paragraph, but this time you are using $3000 instead of $500. Your credit rating should continue to rise as you do this. Once your credit rating reaches the point where you are eligible for a decent interest rate, take your down payment and go purchase your car.

The best auto loan opportunities come to those who are patient and are willing to spend the time necessary to get quotes from as many lenders as possible. Believe it or not, you are in a much better position than the lender. Competition among lenders is fierce and they want your business badly. This is good for you.

What Not to Do When Searching for an Auto Loan

Listen closely. This is what not to do when looking for an auto loan. Do not go visit a car dealership, pick out a car, and then see what kind of auto loan the dealership can get for you. Here, you are in a position of total weakness. You have forced yourself to only have one choice, and are therefore likely to get a bad deal. You want to get preapproved for an auto loan before you step on a lot to look for a car.

What to Look for When Choosing an Auto Loan

There are three things you want to pay attention to when getting a car loan. The first is the interest rate. The second is the length of the loan, and the third is the total amount you’ll end up paying once the loan is paid off. Not many people mention this third point, but it is extremely important. The reason why is because many lenders and car salesman will try to entice you with a low monthly payment. But what they don’t tell you is that the terms are such that you end up paying far more than you normally would once the loan is paid off.

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How to Get a Low Interest Rate

Low interest rate auto loans are available to those who have a good credit rating and a sizable down payment. There are loans available to people that have a bad credit rating, but the terms are usually terrible and you end up paying high interest rates. If you are patient and you have some time, I share a method here about how to improve your credit rating quickly and accumulate a down payment.

Finding the Best Loan

Now you are finally ready to start looking for the best loan opportunities for buying a car. Getting a quote can be a little time-consuming, so again plan on being patient. I suggest requesting two or three quotes a day. Visit as many lenders online as you can and fill out their form for a free quote. As you fill out the first form, copy the information into a text file or a wordprocessing document. This way you can copy and paste your name and other information, rather than typing it over and over again.

This is a very tedious process and is likely to make you feel bored very quickly. This is why I suggest that you fill out 2 to 3 forms a day over a period of 2 to 3 weeks. By the end of the process you should have about 20 quotes. Arm yourself with the best 2 to 3 quotes and head on over to the car dealership. Once you find the car you want, they will ask you if you need a loan. Tell them “yes” and see what they offer you. If it’s better than what you found online, then go with it. If it isn’t, show them the best quote you got online and ask them if they can beat it.

As with anything, you are going to get a better deal if you are patient and have time to find the option it’s best for you if you have to buy a car when you are rushed, you are likely to spend more on the car and end up with bad terms for a loan.

An important part of knowing how to get the cheapest car insurance NH has to offer is knowing what questions to ask the insurance salesman. In addition, you should understand what you are buying. Most people when purchasing car insurance have no idea what they are actually getting for their money. They just know that they are required to have it before they can drive the car. Here’s what you need to know when negotiating a policy.

First of all, you need to understand what the minimum requirements are for insurance in the state you live in. You could check here, for example, to see what the requirements are in New Hampshire, and what the best prices for car insurance concord NH has to offer. Then, you need to decide if you should add additional coverage to that minimum requirement. For example, your states minimum requirement may not result in being able to get a claim that pays out the value of your car should it be totaled.

Basically, you want to make sure that your coverage will take care of all the costs to anyone you may get into an accident with that is your fault. You don’t want to hit another car or individual and then be responsible for settling out of your own pocket. This could result in you being in debt for the rest of your life.find-car-insurance

If it turns out that the coverage you need is expensive, you may want to consider paying in full to save on the penalties or extra charges for making monthly payments. In some cases, purchasing car insurance on your credit card and then paying it off monthly could be cheaper than paying monthly with your insurance company.

Choose a Reasonable Deductible

The deductible is the amount of money that you are responsible for paying before the insurance company takes over. For example, let’s say you are responsible for an accident that does $10,000 damage to someone’s car. If your deductible is $500, then you are responsible for paying $500 and your insurance company is responsible for the remaining $9500. On the other hand, if your deductible is $1000, then would have to pay the first $1000 and your insurance company is responsible for the remaining $9000. The lower your deductible, the less costly your insurance will cost you.

Finding the Cheapest Car Insurance

The strategy for finding the cheap car insurance requires some patience. If you need to purchase insurance right away, then this method is not going to work well. It’s best to shop for insurance a week or two before you need it so you have time to shop.

The strategy is simple. Lets say you want to find the cheapest car insurance Manchester NH has to offer. You would first visit the sites of as many car insurance as you can, filling out as many “free quote” forms as you can. As you start getting quotes, you will very quickly get an idea of what insurance is going to cost you. You’ll start seeing the same quote repeat itself over and over from company after company. This price will likely be what you have to pay. However, keep looking to see if you can find a low outlier.

Once you have submitted 10 to 20 quotes, go with the best option. Be sure to pay attention to the deductible and the coverage you are getting. Most importantly, be sure that the insurance you purchase meets the minimum requirements for the state you live in.

use car loan tipsDoing your due diligence before getting a loan to buy a used car is extremely important. Unlike buying a new car, you can’t be sure what a used car is really worth. You don’t want to end up paying more for a car than what it’s worth. And, in the event that you get in an accident in the car is totaled, the insurance company is only going to pay you what the car is worth. If it’s worth less than the loan balance, then you’ll have to pay out-of-pocket to pay off the rest of the loan.

Kelly Blue Book

Check the value of any used car you are interested in purchasing using the Kelly Blue Book. They have a calculator on their website that allows you to estimate the value of any used car you’re likely to find. Before using their online calculator, you will need to ascertain the general condition of the car. Kelly Blue Book uses poor, good, and excellent for their categories for the cars condition.

CarFax

Also, be sure to get the Carfax report. Carfax is a company that creates accident reports on vehicles based on information provided by insurance companies. Any repairs made on a car that were paid for by insurance claims will be listed on the report. Show the Carfax report to a mechanic or someone who knows about cars to find out if any of the previous damage done to the car makes it a bad choice for purchase. Of course, any major repairs that were done to her vehicle but were not paid for by insurance will not show up on the Carfax report.

Take Your Time

As I say in all my advice for buying cars, don’t rush through the process. Taking your time will result in you finding a better car at a cheaper price, and finding a loan with affordable terms.

The Loan

Ideally, you will want to get preapproved for a loan before you start looking for a car. You want to find a loan that is four years long, five at the most. And of course, you want to get the lowest interest rate you qualify for. If you have a low or bad credit score, it’s best to spend a few months working on improving your credit using strategies I share here.

You will want to spend 2 to 3 weeks filling out online auto quote forms. Type all your information into a document so that you can copy and paste it rather than having to type it over and over again. Once you have about 20 quotes, choose the best one and go with it.

I want to reiterate that when buying a used car it’s extremely important that you don’t end up upside down in a loan. Do the proper research to make sure that your car is going to always be worth more than the balance on your loan throughout the term of the loan. You never want to own more than the car’s worth.

I’m going to start this article by suggesting that the only reason someone should refinance an auto loan is to get a better interest rate. I do not recommend extending the term of your loan during the refinancing process. For example, if you currently have two years left on a four year loan and you want to refinance to lower your monthly payment, do not refinance back out to four years. You should keep the length of the loan to two years. The money you save should be achieved through getting the better interest rate. Your monthly payment may be lower if you refinance from two years back out the four years, but by the time you end up paying off the loan you will have spent a ridiculous amount of money on your car, much more than it’s worth.

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What If There’s Extra Cash after the Refinance

I strongly recommend that you don’t walk away with extra cash from refinancing and auto loan. Remember, unlike a house, cars always lose value. They never gain value, and less there an antique. The goal with any auto loan should be to pay it off as quickly as you can. If you somehow and up with some leftover cash after refinancing a loan, immediately put that money into making an extra payment on the loan so you can pay it off quicker.

How to Get a Much Better Rate When Refinancing

If circumstances were forcing you to purchase a car with a high interest loan as a result of bad credit, then from day one after purchasing the car you should set in motion a plan to refinance the car within a year. I offer a strategy here that shows you how to improve your credit rating. Basically, you are going to spend a year getting small $500 loans from several different banks, using the loan from one bank to pay off another loan from the previous bank. Once you have done this with five or six banks, go back to the first bank and start the process again. Ideally as time goes on, you increase the amount of the small loans to 1000 or $2000. Basically, this process of borrowing and paying off several loans over the course of a year should drastically improve your credit score. Immediately refinance your loan once the strategy has improved your credit rating.

As I always suggest, give yourself at least three weeks or a month to search for the best loan. You want to request quotes from as many lenders as possible, 20 to 30 is perfect. This process should result in you finding the absolute best refinancing terms available to you based on the credit score you are able to achieve.

I would like to reiterate that you should never refinance a loan simply to reduce your monthly payment while extending the term of the loan. You want to pay off a car loan as quickly as possible. In many cases, refinancing a loan that involves extending the overall term of the loan could result in you becoming upside down on your loan, meaning that you owe more on your car than it is worth. The should be avoided.