Auto Car Loan
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Car Financing Problems & Solutions

When financing with an auto car loan, consumers often make the same common mistakes and face the same problems. Here are the top financing pitfalls and how to avoid them.

  1. Not knowing your credit score before you apply for an auto car loan. Any time you apply for any major loan or line of credit, you should go into the transaction knowing your credit rating. Your credit score is the biggest determinant of the interest rate you will receive, so it's important to make sure your credit report is clean and accurate before applying for an auto car loan.
    • SOLUTION: Order your free credit reports from all three major credit bureaus to review them for items that might prevent you from qualifying for the best rates. If you see any erroneous items, dispute them in writing immediately. Check to make sure all of your accounts are in good standing and there is no evidence of identity theft.
  2. Showing up at the dealership without approved auto financing. Some people do this because they are not aware of the competitive auto car loan rates available elsewhere; others do it because they think they will qualify for a lower rate at the dealership. Either way, arriving at the dealership without an approved auto car loan deal puts you at a disadvantage in the negotiation process. Approved financing can be a huge bargaining chip when it comes to vehicle price and even interest rates if you're still open to dealer financing.
    • SOLUTION: Apply for a no-obligation auto car loan on our site. Even if our auto car loan saves you just 2% on interest compared to the dealer, you will save $1500 over the life of a $26,000, 4.49% APR auto car loan.
  3. Not researching interest rates. You are easy prey for the dealer if you don't do your interest rate research beforehand. If you don't know what current auto car loan rates are like, you won't know if you're getting a good deal.
    • SOLUTION: Shop around online for the going rates on an auto car loan. You can use sites like ours to get multiple quotes on an auto car loan with one application. You might also check the rates of your bank or credit union.
  4. Overspending at the dealership. It is easy to get swept up in the heat of the moment at the dealership and blow your new car budget.
    • SOLUTION: Set a practical price for your new car and stick to it. Remember that a car payment and all related expenses should account for no more than 20% of your net monthly income. If you are approved for a certain auto car loan amount, this will help you stay within your budget limits.

If you have any questions, please check out our "Frequently Asked Questions" page.