Lenders Provide a Wealth of Auto Finance Alternatives

By John Campbell

If you are in the market to finance a new automobile, numerous lenders nationwide are currently competing for your business with a wealth of financing options at your disposal.

If you have excellent credit, the sky's the limit in terms of how much financing you qualify for with interest rates that won't cost you an arm and a leg. If your credit is good, you will likely qualify for most offers with competitive interest rates.

Before you choose an auto loan you should shop around for the best rates from direct lenders and then see if the auto dealership you plan to do business with has any comparable loans available.

Direct lenders are independent financial institutions that offer many different loan options. These include banks, credit unions and finance companies.

Many banks offer competitively priced consumer loans. Some banks also offer discounted loan rates to customers who have checking or savings accounts at these banks. If you are eligible to join a local credit union you may qualify for even better deals on auto loans. Many credit unions are well known for offering low priced loans for their members, as well.

Finance companies are another excellent alternative. As many finance companies now finance exclusively online their overhead costs are quite low. Low overhead costs for these companies can translate into lower interest rates for consumers.

If you are approved for an auto loan make sure there is no obligation to take out the loan. Most lenders should be able to offer you a guaranteed loan rate that you can take or leave within a certain timeframe, like a week.

You can save money at the dealership by having guaranteed financing before you even begin shopping for a new automobile. If the dealership knows you have guaranteed financing in hand, they'll be more likely to negotiate with you in the hopes of making a quick sale.

Auto dealerships may also offer special financing for certain vehicles. Once you've successfully negotiated the price of the vehicle, ask if the dealership offers any special financing. The dealership may be able to offer you better financing terms than the guaranteed loan you walked in the door with.

You may also qualify for certain incentives including lower interest rate financing deals sponsored by the manufacturer.

Before you agree to receive any financing make sure you get a full disclosure in writing of all the fees, interest rate and any other terms and conditions that are associated with the loan. This way you can avoid any unpleasant financial surprises once you start paying off your loan.

Shopping around may take a little bit longer than simply going for the first auto loan you're offered, but the savings will pay off and you'll get a better deal in the long run. As an informed shopper, you'll be a happier shopper.

© cashbuzz.com John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.

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