5 Tips To Getting Your First Car Loan
Getting your first car loan can sometimes be stressful, but it should be an exciting time for you, so we have together a few tips to getting your first car loan to perhaps make this a less stressful experience for you.
Tip 1 – Only Apply Once You Are Satisfied With The Offer
Quite often a first time borrower makes the mistake by formally applying to find out his interest rate. Often this is just a sales tactic and a good credit assistance provider should be able to estimate what kind of interest rate you would achieve without the need of placing a credit enquiry on your credit file.
The higher the number of credit enquiries on your file within a short period of time, the harder to becomes to get finance and could prevent you from obtaining an approval , or having to accept one at a higher interest rate.
Tip 2 – Use A Finance Broker
Due to tip number 1, using a good, professional car finance broker can save you the hassles of trying to ‘guess’ which lenders will approve your loan at the best interest rates. As finance brokers use many of the main stream motor financiers, they can save you the time and assist in getting it right the very first time. Learn more about getting good finance rates, car finance brokers and how to get free advice here.
Tip 3 – Cash Deposit
If you have any savings you can put towards the car purchase, this can lower the risk for the lender in their eyes and give you a wider selection of lenders to negotiate the best car loan interest rates for you. A trade-in that has no finance owing on it, can also reduce the lenders risk and the more equity from trade-in and deposit going into the deal, the better it presents to the motor financiers.
Tip 4 – Savings History
If you have been able to show a good savings history from your bank statements, which will show your balance increasing every month, this will show the motor financiers that you do not require to spend more than you are earning and can give them more comfort knowing that you don’t live pay cheque to pay cheque.
Tip 5 – Realistic Vehicle
If you are looking for a 30 year old classic vehicle for your first car loan, you most likely will have next to zero chance of a car loan approval. Most lenders will shy away from this type of asset and those that don’t have very strict criteria in order to approve one. Learn more about how to choose a suitable vehicle to purchase according to your circumstances here.
In the eyes of the lenders, a suitable first borrow would be a later model vehicle around the $20000 mark, but this can be reviewed on a case by case basis and is not a rule set in stone.
Tony Simmons is a car enthusiast and advocate for fair trading between car sales and consumers. Tony has worked as a car sales man for more than 15 years. He has a family of five and hopes to one day own a car dealership where consumers can relax in knowing they will always get a good deal.