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Money Saving Tips
First, learn all you can about maximizing
discounts or other savings that you may be entitled to. You
can save thousands of dollars by learning a few things. The
dealer's real cost on the car is typically less than invoice.
Find out the lowest prices that people are paying for that
car, then maximize your savings by researching loans, extended
warranties, car alarms, etc. Get pre-approved at the lowest
rate before you start negotiating with dealers.
Use the Internet to get 5 or 6 price
quotes before you start negotiating the price of the car with
any dealers. Become aware of any hidden charges or
"payment packing" by calculating your own monthly
payments first.
Shopping for the Best Financing
Many manufacturers have introduced
unprecedented financing rates, or interest-free financing, on
new vehicles. Prospective buyers need to be aware of all the
requirements and hidden obstacles.
How to qualify for special financing
Simply put, qualifying for special
financing depends on two things: your credit score and your
disposable income.
Credit Score Dealerships usually use a
FICO credit scoring system, developed by Fair, Isaac, and
Company. A FICO credit score is an attempt to distill an
individual's behavioral patterns into an indexed number
designed to predict how likely that person is to repay a loan,
or make credit payments on time. The score, which is generated
by a computer model, is based on how well you've handled
credit in the past. Your FICO credit score is a magical
3-digit number that describes your credit worthiness. The
average FICO score in the U.S. is 725, but most dealerships
require a score of 750 or higher to qualify for these
financing specials.
Did you know that up until the past six
months, you weren't able to find out what your score was? With
the power of the Internet, consumer advocates created
awareness and public pressure on the credit agencies to
disclose credit scores! (Do you want to know your credit
score? You can find out real-time at Equifax for $12.95!)
Disposable Income Receiving special 0.0%
financing depends not only on your FICO score, but your
available disposable income, too. The dealer will probably
limit your total monthly payments, including the new loan, to
40% of your gross monthly income.
Where are the competitive loan rates?
Shop you local credit union - They are
much easier to join than in the past. However, you still have
to go into your credit union to actually join and apply for
the loan.
Research online!
The best online auto loan shopping service
research numerous accredited banks for the most aggressive
interest rates. Being prepared is as good as cash in hand.
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