Applying For an Auto Loan

Applying For an Auto Loan

When it’s time to shop for a new car the first thing you need to decide is how much money you can spend. How much you can spend is dependent on several things:

  1. How large your down payment is.

  2. The number of years you want to make payments.

  3. The loan amount a bank or finance company will approve.

  4. The trade in value, if any of your current vehicle.

  5. Rebates and Incentives offered by dealers and manufacturers.

Shopping for a new car can become very stressful, but there are a few things you can do ahead of time to make the experience a little less stressful. One of the most stressful parts of the process is the financing of the vehicle. Should you use a bank or should you get dealer financing? Should you wait to see if the amount you request is approved or should you get pre-approved?Online Loan Calculators

Online loan calculators let you enter pertinent data and will calculate the amount you can borrow based on what you enter. Using the calculator you can look at how much you can afford based on different interest rates and any trade-in value on your current vehicle. This will give you a basic idea of what you can expect to be approved for.

Getting Pre-Approved

Whether you are getting financing from a dealer or a commercial lender you should find out how much they are willing to lend you. Getting pre-approved can take some of the guesswork out of the process. You also avoid the embarrassment of having the loan turned down at the dealership. Many dealers can work with you to get a loan amount pre-approved so that you know in advance exactly what you can spend. Be sure to shop around for the best deal if you decide to obtain financing from a bank.

Dealer Incentives and Rebates

One of the things you need to look into is what incentives and rebates are currently being offered. At any given time there are dozens of manufacturer or dealer incentive programs active. These include rebates that you can apply to your down payment, or special financing at lower interest rates. You can save thousands of dollars in the purchase price or finance charges by using these rebates and incentives.

Dealer Extras

If you decide that you want to use dealer financing you should first decide where you want to buy the car. You should shop around and see what kind of offers the dealers are throwing in if you decide to use dealer financing. Many dealers will throw in extras like free oil changes, tire rotation, or free gasoline to tempt you to buy and finance your car with them. It is important to remember that if you are buying a new car the warranty on the car will be voided if you don’t follow the recommended maintenance schedules. Many dealers will send you reminders and special pricing to have these maintenance items done by the dealer.

Buying the Car

If you are using bank financing you can go to the dealer with a pre-approval letter from the bank that will give a price range that you can afford to spend. Once you have selected a car you will need to bring the details about the car like: Model, Price, and VIN to the bank for final approval of the loan. If you are using Dealer Financing you will finish the application and approval process right at the dealership.

Written by John Walbridge is an experienced Internet Sales Manager at Bloomington Ford Lincoln. John handles the day to day Internet and digital activities for the dealership. Bloomington Ford Lincoln serves Greenwood, Martinsville, Bedford and all of Indianapolis, Indiana. Learn more about different types of auto loans and insurance services, on this website: