Is it possible to own a new car, even if you don’t have $20,000 to pay out?  Definitely.  Car loans make car ownership an affordable reality, and virtually anyone can arrange for financing.  If you have a good credit rating and sufficient income, you will be able to choose from a selection of auto loans.

Step 1
Choose your car before arranging your loan.  The finance company  or bank will want to know what you’re buying, and how much you’ll need to borrow.  Shop around by visiting local car dealers and checking automotive websites.  Once you know precisely what you want to buy, you can negotiate a price with the seller.  With price in hand, you’ll find it faster and easier to secure your financing.

Car dealer's yard with silver cars

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Step 2
Shop around for the ideal interest rates.  There are online websites like Bankrate.com that announce surveys and polls of loan rates across the United States.  The rates of auto loans will fluctuate with the market, and they definitely vary from lender to lender.  Shop around to find the best lending terms and the lowest rate.  Checking with credit unions, local banks,  and even car dealers can save you money.

Step 3
Buying a new car is a costly, and sometimes risky business.  Auto loans require a lot of money, and you need to prevent any possibility of getting ripped off.  Check with used car values to see how much your present vehicle is worth.  Knowing your car’s value will  assist you to get the most money for your trade-in.   Consult a research online or a black book  to find the current market value of your vehicle.

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Step 4
Decide how much you’re able to spend as your down payment.  Providing cash up front can help you to secure an auto loan, as it proves to the lender that you’re willing to repay and are responsible.  It also reduces the amount of principle and interest you’ll pay throughout the term of your loan.  Some lenders require a down payment of twenty percent of the vehicle amount.  Bear in mind that the value of your current vehicle may be applied toward your down payment.

Step 5
Once you know the type of car you’re buying, the available rates, the purchase price,  and the amount of down payment you’ll need, it’s time to shop for a lender.  Be careful in this process, as there are many shady lenders who are quick to hand out cash in exchange for very high repayment amounts.  Compare interest rates, monthly payment amounts,  the loan term (two years, three years, etc),  and, of course, how much you’re able to spend.  These aspects will all help to determine your choice of lenders.

Step 6
Don’t panic if you don’t qualify with the first lender you select.  There are literally endless auto loan choices available to you.  Just ensure that you’re not living beyond your means.  You may need to save a little more to come up with a bigger down payment, or simply opt for a less expensive car.

Step 7
It’s easy to build a lousy credit rating, and the bad rating can hound you for a long time.  If your credit rating is keeping you from securing an auto loan, you can start working to rebuild it.  Settle your bills on time, and clear up any outstanding loans. Six months after, you’ll be able to reapply for a new credit rating.  If this is not a choice, you can choose to look into bad credit auto loans.  Insurance companies that offer bad credit loans don’t necessitate their customers to submit their credit histories, so it is possible to secure an auto loan despite poor credit.  However, bear in mind that the financier will view you as a risk, and you will pay higher rates.

Auto loans make it possible for practically anyone to buy a new car.  It’s why you see a lot of new vehicles on the road today.  If you think you can’t pay for the car of your dreams, shop around.  You might be surprised at what you discover.

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