There’s nothing wrong with making mistakes, as long as you learn from it. However, if that mistake is costing you money, you might want to learn about it before you even commit it.
No matter how much a salesperson tells you that he want to help you, you have to keep in mind that he earns money from you. So, the more you pay, the better it is for them. While this is not true for everyone, it’s at least something you must seriously consider the next time you sit with a lender and make negotiations.
If you don’t have any background in banking and accounting, it’s easy to get fooled with unnecessary upgrades. The only solution is to be wary. Here are car loan mistakes you should be aware of if you want to spend your money wisely.
Buying a car based on the monthly payment
When you get title loans los angeles, what usually happens is that you negotiate for the monthly payment. If you tell the lended the exact amount you can pay monthly, then you lose your chance to bring the purchase price down. Moreover, it gives the lender a great opportunity to hide costs in add-ons and high interest rates. Instead of telling them exactly how much you can pay monthly, it’s best if you discuss each car cost separately.
Choosing low-interest rate loan or cash rebate without prior research
Before you choose low interest rate loan or cash rebate, it’s best if you do your homework first. Review your current financial status and try to match it with the offer. The method that will render the most savings will vary from one person to another.
Since low-interest rates are not available to everyone, you might want to talk to a professional on how you can save. You can also use car rebate incentive calculator to make the reliable comparison.
Letting the lender take advantage of your credit score
You must know by now that if you don’t have a good credit history, you won’t be able to get your loan application approved. However, having a good (or too good of) a credit score can have a negative impact on you, too.
If you just allow the lender to define how much your credit is worth, you might be an easy subject of high interest rates. After all, a borrower that has a high credit always lands with a better car loan rate than those with low scores. But what if you just want to be able to save as much money as you can? Then, you might want to get a pre-approved car financing.
Paying add-ons you don’t really need
In a report submitted by the National Automobile Dealers Association (NADA), about 37% of the gross profits in the finance and insurance car sales department is made through add-ons.
Credit life insurance or extended warranty for your car might sound good. However, if you don’t really need, then don’t get it. Learn how to say no. Also, you can easily avail these from other dealers in a much lower price. Again, it pays to do your research beforehand.
Don’t just agree to every suggestion of the seller because you want negotiations to go as smoothly and as quickly as possible. If you are not paying the right amount of money for the loan that you need, then smooth and quick negotiations are not worth it.