5 Essential Things to Know About Car Loans | YourMechanic Advice

5 Essential Things to Know About Car Loans

Unless you’re sitting on plenty of cash, you’ll likely need to finance your new car. There are plenty of options available for car loans, and that can make things tricky – especially if you’re trying to decide between new or used or bank or dealer financing. Below you’ll find out the essential things to know about car loans so you can make the best decision for your needs.

Financing Options

There are a variety of ways to secure financing. You can go through a dealer, your own bank or credit union, a used car lot or even take advantage of the increasing availability of online financing. Keep in mind that a dealer offers manufacturer incentives, while banks and others can’t do so.

Your Credit Matters

Anytime you take out a loan, your credit score plays a key role in how much you will pay. If you have great credit, your interest rate will be lower. However, if you have bad credit, the interest can increase dramatically – especially if going through a bank or dealer. In these situations, online financing might offer lower rates, so make sure you do a bit of research before you choose how you’ll finance.

Know Your Budget

Before you ever step on the lot, make sure you already know what you can afford each month – and stick to it. Salesmen work on commission, so their goal is to sell you the highest-priced vehicle by any means possible. Being able to tell them exactly what you’re willing to pay will reel them in a bit. However, you’ll also have to keep reminding them since they will try to push you into a higher-priced vehicle.

Ask Questions

All that paperwork can be daunting, so if there is anything you don’t understand – ask. There are many fees and other charges that might pop up, so you need to make sure you know exactly what they are before you sign.

Make Sure You Have Approval

You should always make sure you have the approval for the loan before you sign the contract or leave the lot with the vehicle. If you’re told that the salesman is waiting on the approval to come through, it means nothing is finalized. You should never leave your old vehicle and take possession of the new one until you know for sure.

Car loans are important and often necessary for most car buyers. If you are purchasing a used vehicle, make sure to contact YourMechanic for a pre-purchase car inspection to avoid buying a car with serious issues.


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Chris

21 years of experience
1852 reviews
Chris
21 years of experience
Mercedes-Benz SLK280 - Pre-purchase Car Inspection - Laguna Hills, California
I hired Chris to inspect a car I wanted to purchase. He arrived on time and gave me a very detailed report, took the time to call me after to review details, and share his impression of the car. He was great and very knowledgeable, I would highly recommend him!
Lexus IS250 - Pre-purchase Car Inspection - Irvine, California
Smooth experience, was able to communicate succinctly and arrived early to the appointment. Thoroughly completed the 50-point check and gave me his professional opinion. His report on the vehicle reflected knowledge on the vehicle, along with giving me his own estimate on the pricing. Definitely helped me with my purchase.

Jason

14 years of experience
222 reviews
Jason
14 years of experience
Honda CR-V - Pre-purchase Car Inspection - Flushing, New York
Jason was great, prompt, and extremely helpful! He explained every aspect of his concerns with the car and answered all our questions in detail. Since I don't know much about cars, it was amazing to have someone who explained how things work in a simple but well rounded way. We are so appreciative of his help!
Dodge Charger - Pre-purchase Car Inspection - Carteret, New Jersey
Jason came on time, explained the procedure and immediately started the pre-purchase inspection on my 2012 Dodge Charger. Very thorough, very knowledgeable! I’ll be using YourMechanic for the suggested maintenance and repairs.

Anderson

26 years of experience
67 reviews
Anderson
26 years of experience
Toyota Camry - Pre-purchase Car Inspection - Jamaica, New York
Anderson was great! I was unsure about my purchase because of the year and the condition. Anderson's inspection really put everything into perspective. Thank you!
Land Rover LR4 - Pre-purchase Car Inspection - Little Neck, New York
Anderson is amazing! A previous mechanic was no-call/no-show through this site when I was at the dealership, so I was skeptical of the service. However, but I'm glad I gave it another go and Anderson came through the next day! HUGE thanks to him for arriving early, being thorough, and most importantly, communicating with me as I was not able to be in-person for the inspection. Thank you, Anderson!

Chuy

13 years of experience
202 reviews
Chuy
13 years of experience
BMW 330i - Pre-purchase Car Inspection - Hinsdale, Illinois
Professional. Couldn’t be there to inspect with him and gave me a full detail inspection and his honest opinion ( which I asked for ) did an amazing job.

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