One of the most intimidating and tricky steps in the process of buying a new vehicle is negotiating financing. With a little know-how, however, you can score great deals on your car loan and walk away feeling confident that you’ve had a successful financing negotiation. Read on to learn what you need to do to secure a lower rate on your next vehicle purchase.
Get Pre-Approved for Financing
If possible, get pre-approved for financing before shopping for a vehicle. This will give you more leverage when negotiating because it shows the dealer that you already have a financing offer on hand. While it may seem like a lot of extra work, it’s well worth it, given just how much money (in terms of interest payments) you can save over the course of the loan term.
Shop Around
When it comes to shopping for car loans, one of the biggest tips is simply to shop around. Consider approaching multiple lenders, even if it means having to make multiple trips to different banks or dealerships. The more quotes you get for your loan, the more likely you’ll find one that fits within your budget and gets you into the car you want without breaking the bank.
Know Your Credit Score
Another tip when it comes to buying cars is knowing your credit score. Knowing what your credit score is can help determine how expensive your loan will be, allowing you to work out and assess how much money you’ll need for down payment or monthly payments. If there are any errors that you happen to spot on your report that could negatively impact your score (such as late payments or fraudulent charges), correct them immediately with the appropriate parties before applying for financing or other types of credit applications.
Ask for Discounts and Perks
Dealerships want customers who will keep coming back for repeat purchases — so don’t be afraid to ask for discounts. If they don’t offer any discounts, make sure to at least check if they can throw in a few extras, like, say, an extended warranty, for free. If you have a good credit score and seem like a reasonable customer, most dealerships will be happy to accommodate your request.
