Creative Consultant Proves Getting In The Driver's Seat Is Easy |
||||||||||||||||||||||||||||||||||||||||||||
Julie Shapiro here -- I'm a creative consultant in the midst of purchasing a new car. Making a major purchase can be confusing if you don't do your homework. Particularly when the car dealers use unfamiliar phrases like "down payment" and "APR." making you feel like you've walked into some private club. With the Internet as your ally, these terms become raod signs to follow to get in the driver's seat. It's that simple. Here's my process in five easy steps:
The information compiled in this article will save you time on your car purchase. I used the Internet search engine Google as my research buddy. If I needed to learn something, I simply typed in keywords and found the useful links listed in this report. Some of these links were easier to find than others. For example, many of the links listed under car manufacturers took me hours to locate. But with car loans, it was easy. I simply typed the keywords 'car loans' and found everything I needed right away.
Here are some basic questions, whick kept me focused:
Choosing the right SUV, when there are dozens of makes and styles, just seemed daunting. I wasn't sure where to start, so I visited all the major car manufacturer's websites and checked out the cars and the available options. While style and functionality are important, safety really is number one. Consumer Reports with unbiased indepth coverage for safety on new and used cars really made it easy for me to narrow down my selection to:
Taking a test drive is another important part of the selection process. I visited my local Toyota and Honda dealers and drove their SUVs. I lied the way the Toyota 4Runner handled quick turns and freeway driving. It was a nice smooth drive. Driving the Honda CRV felt more like driving a sports car and not a larger vehicle, which is also attractive. I'm going to take a few more test drives and make my final decision based on the dealers' time frame. While this may sound strange, I've discovered a little known fact, that the dealers actually mark down prices at certain times of the year to get rid of inventory. The best time of year to purchase a car from a dealer is during the last two weeks of December and from July through October.
I learned both the average price and the base price (the price of the car without any special options, otherwise known as the manufacturer suggested retail price) by visiting various dealerships and comparing prices. Consumer Reports suggests finding out what the dealer price is and negotiating up from that figure as opposed to working from the sticker-price down. Some dealers will bargain on their profit margin, which is often between 10 and 20 percent. In many cases this is the difference between the manufacturer's suggested retail price and the invoice price. Negotiating With The Dealers The shear notion of negotiating with car dealers at first intimidated me. I found out by going into the dealership prepared with a price, the pressure of negotiating is on the dealer, they're the ones that sweat.
What's FICO got to do with a car loan? Everything! It's the lifeblood of getting an auto loan. FICO stands for Fair Isaac & Company and is a score based on your credit report. When you apply for a car loan, the credit bureaus evaluate your credit profile and assign a score. This score is used to estimate your credit standing. Experian, Trans Union, and Equifax all have their own credit scoring system. How is the FICO Score Determined?
Don't get bitten by the car shark. There is a myth about credit reports. Many people are under the wrong impression that if they get a credit report, their credit score goes down. Sadly, car sales people often perpetuate this myth. They get away with this by feeding on consumer ignorance and charging a higher interest rate. My friend Lisa warned me about this unsavory practise. With a credit score of 780 (Excellant Rating) Lisa should have been eligible for a 0% interest rate. But the dealer she visited wanted to pull a fast one. Lisa filled out the credit application at the dealership and felt like she was in a bad movie when all of the sudden a bunch of finance people with "worried looks" on their faces approached her. They showed her a supposed report of her "credit score" with the number of 580 circled in red and went on to explain how they could get her financed at 10.9%, but not at the advertised 0% interest rate. When questioned, they lied on the spot. Lisa, showed them her credit reports, promptly left, and bought car from an honest dealer. She secured a 0% interest loan on her own. What is a good credit score for approval of a car loan? A credit score above 680 is considered a "prime borrower". With this rate you can get a good APR on your loan. A credit score below 680, is considered "sub prime", and will pay a much higher APR for a car loan. If you have a credit score below 550, go to CarApproval.com Can you Improve your Credit Score? Yes. However, it is not possible to legally remove accurate information from a credit report. You can remoce any wrong information that's listed in your file. If you find something in your credit report that is inaccurate or incomplete, simply ask the credit-reporting agency for a dispute form. Then submit your dispute in writing with copies of the disputed charges and any other necessary information. These corrections should be make well in advance of purchasing a car, because you never can tell the exact impact a change will have on your credit score. Can Debt Consolidation improve the FICO score? Yes. By reducing your debt, you can improve your credit rating and increase your chances of being approved for the loan amount you need. Here's a helpful resource for debt consolidation.
Here is a great resource about credit ratings and credit reports for car loans. This site also has great information on obtaining a car loan.
You don't have to be a math whiz to understand and obtain an auto loan. As a creative consultant, naturally I'm more of a right brain type of person (that's the art side) vs. the left side of the brain, which is more numbers based. So, when I discovered websites that would actually calculate how much money I needed for a loan, including different scenarios for a down payment I breathed a huge sigh of relief. I didn't have to do fancy calculations and wonder if I was reaching the right conclusions. These sites take all the guesswork out of the process and make it easy to get a loan.
Dealers advertise 0% and 1% financing as their quote "Super Deal." Typically, these loans are for 24- or 36-months. The dealer makes up for the cash by offering a higher monthly payment. Don't fall for this trick. Did you know that you can get affordable car auto/car financing on your own, scoring a much better interest rate and loan terms, compared to dealer financing? Even if the dealer says, "your credit is no good", there are auto loans for people with bad credit. Don't be fooled be the dealers' fancy talk. Besides, auto loans do exist in many forms, including: refinance auto loans, low interest auto loans, and loans to buy a new car. Don't forget to look at the car loan calculator and tips listed here, this site makes calculating car loan payments and other loan details easy. |