When it comes to financing your new or used car you might not think about the Federal Trade Commission (FTC) as your first source of advice. This organization, however, exists to provide education and resources for a wide range of consumer financing and safety needs.
When it comes to car buying, they have a range of important resources available for all aspects of the process, including financing. Check out what the Federal Trade Commission has to say about car financing, and learn the resources you have to get started on your next new or used car purchase!
The Federal Trade Commission on Car Financing
Car Financing – Dealers May Not Be Best
The FTC is quick to point out that car financing offered at the dealer may well not be the best possible option for those looking to buy a new car. We’ve all seen advertisements for no-money-down, 0% interest financing, but what they don’t tell us is that only people with truly outstanding credit are eligible for these deals. Most folks just don’t have the credit to get that kind of interest rate, even those with good credit.
Offers Vary from Lender to Lender
The Commission recommends that prospective buyers directly contact a number of lenders to get financing offers and compare their offers with those of the dealer, and with each other. This will enable you to shop around to find the best deal. Consider both the APR (annual percentage rate) and the loan term.
Don’t focus so much on monthly payment until you’ve got the terms of the loan itself settled. After you know how much you’re borrowing and the interest rate, you can work out an acceptable term for monthly payments.
Beware Borrowing Conditions
You might see a dealer offering what appears to be an outstanding deal on a specific make or model of vehicle. You could very well discover when you go in that to get this deal, there’s no negotiation allowed, and they require a huge down payment. It might, in the end, be more affordable to buy a lesser car with a higher interest rate than to meet the borrowing conditions for a low rate on a high-end vehicle.
Consider Your Options before You Sign
Don’t sign a contract without carefully reviewing all the fine print first. Make sure you know and comprehend the terms of the financing and understand if it’s affordable for you. Make sure that the contract is signed by both you and the dealer, that it’s completely filled out, and that you have a copy before driving away.
Insurance and Service Contracts
Many lenders might require you to purchase insurance on your loan, which could include gap coverage to pay for the car if it’s totaled before you pay it off, or credit insurance to pay the remainder of the loan if you die or get disabled. Consider whether this is worthwhile or necessary for you, as it will increase your loan amount.
If you’re looking for a great deal on auto financing, contact BlueSky Auto Finance. We work with a network of national lenders and dealers to get you a great deal, regardless of your credit. Just answer a few basic questions and wait for the offers to come in! Log on to get started today.