Best Auto Loan Options
There are a ton of options out there for auto loans. How do you know which one to choose? The most helpful way is knowing the best places to go to get your car loan. Here are three great options. You can be pre-approved for a maximum amount through your local credit union or bank, work through a credit union or bank of your choice at purchase, or you can choose a loan provider at the dealership. Which is best in your situation is highly dependent on whether you’re buying a new or used car and whether or not you’re purchasing through a dealership or private sale.
If you choose to be pre-approved through a local credit union or bank, you’ll have a check on hand to give to the seller. This approach has a few significant benefits. First, it helps to keep you on a budget because you know exactly how much you can spend. Second, it prevents you from having to put down a deposit and come back for the vehicle later. If you like the price and the car you can drive away no matter what time of day the deal closes. You’ll already know what your monthly payments will be and won’t have to decide on the spot if you can afford whatever the salesperson is attempting to upsell you. It’s also easier to avoid accidentally signing up for services you don’t want during the loan process. This method is useful for purchases through a dealership as well as buying through a private sale.
Working through a credit union or bank of your choice after purchase is another straightforward way to have some control over who owns your loan. Unlike pre-approval, you don’t need to decide your spending target ahead of time. This approach can be helpful if you have a spending target but want to be able to go higher if you believe the vehicle is worth the expense. It may take a little longer to process the auto loan depending upon whether your desired lender is one who has a relationship with the dealership. The time of day may also be a factor. If you agree on a price outside of business hours, you may need to leave a deposit and wait until the next business day to process the loan. If you sign the papers at the dealership, read the paperwork carefully to avoid signing up for any unwanted loan services. This method is only practical if working with a dealership and wouldn’t be as helpful with a private sale.
Last, but not least, let the dealership manage your financing. Many people do this because it’s easy, straightforward, and convenient. It requires no work ahead of time and minimal effort at the dealership. The loan can typically process outside of regular business hours, so it shouldn’t matter what time you close the deal on your new vehicle. Read your paperwork closely to avoid signing up for unwanted loan services. All three methods work great depending upon your approach. Enjoy your new car or truck!