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Car Buying Tutorial

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Everyone needs reliable transportation, and this often involves trading in your older car for a newer model. Different factors determine whether you’re able to buy a car.

Lenders take different things into account, and knowing how the buying process works may help you qualify for a loan and buy the car you need.

 

Car Buying Tutorial

Car Buying Tutorial

1. Stay with the same employer for a minimum of 6 months

Retain at least 6 months of paycheck stubs to show to auto loan lenders. Being employed for at least 6 consecutive months indicates stability, and you’re more likely to get approved for a car loan.

 

2. Improve your credit score

Get a lower interest rate on the auto loan by establishing a high credit rating. On-time bill payments and low balances on credit cards help reverse bad credit and raise your rating.

 

3. Decrease the loan balance with a down payment

Plan to save between 10 and 20 percent for a down payment. Down payments help you negotiate a better interest rate, and you’ll save money on the monthly payment.

 

4. Use a co-signer, if necessary

If you have no credit history or a bad credit rating, get approved with the help of a co-signer. To benefit from the co-signer arrangement, the person chosen must have a good credit score.

 

5. Check around for the best rate

Get auto loan rates from your personal bank, and then compare this rate with the interest rate offered by the dealership’s finance department.

 

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