There is one part of the vehicle purchasing process that is just as important as finding the right car and getting a good deal; financing. Depending on numerous factors, there is a wide margin of what you might qualify for and how much your monthly payments will be. If you are an auto buyer that likes to know what you are getting into and how to find the best overall deal, this is the article for you.
Several things determine the terms of your loan. From what type of car you purchase to the total amount you are financing to how much you owe on your trade-in, all play a role in the process. To learn what goes into getting financed at a Buffalo Chevrolet dealer near you, read on:
Buying vs. Leasing
These are the two most common ways to purchase a vehicle, and there are also various hybrid versions of the two types of loans. The drivers who prefer buying to leasing or vice-versa rarely switch back and forth between the two options. Deciding which one you prefer will help you skip a big step before you even begin shopping for a car. Here are a few details to get you started:
New vs. Certified Pre-Owned vs. Used
New vehicles at your local dealership will always qualify for the best interest terms, often resulting in significantly lower rates than certified and used cars. Certified pre-owned, however, undergo a thorough inspection process and qualify for lower rates than regular used cars.
Why Customers Prefer Buying
If you are someone who likes to travel in their vehicle, or simply logs a lot of miles for work or other tasks, buying means you don’t have to worry about these things. It also means you have a physical asset after the end of the term.
Why Customers Prefer Leasing
For drivers who like to get a new vehicle every few years, as well as those who may be retired or disabled and drive minimal miles, they can own a vehicle that is always under full warranty and has the latest features.
Understanding The Role Credit Plays
Most people know that their credit history is the main factor in financing any type of loan, but they often don’t fully understand what that means or how to take care of it properly. If there are some less-than-flattering details on your credit report, you may be able to fix them before ever stepping foot onto the dealership. Or, if you need to pay something off, you can make time to get it done.
Here are a few important factors regarding getting a loan:
Debt To Income
How much you make vs. how much you spend is always a critical factor in determining what you qualify for regarding a loan. Even if you have stellar overall credit with perfect auto credit, but are at 85% of your disposable income, you will be very limited in your options. Be aware of where you are on this spectrum.
Vehicle Value vs. Amount Financed
A new or pre-owned vehicle has a set, book value. That means it has a range of how much can be financed on it, considering how fast it will depreciate. If you are rolling over negative equity from a previous loan, as well as not putting any cash down, it will likely affect your rate and payment.
Previous Payment History
Overall credit is important in determining the details of your loan, and automotive credit is even extra important. If you have a few dings on your credit report but you have a really good car history, it can offset other minor concerns.
And if you have great or perfect credit with a specific company, such as General Motors, you can sometimes qualify for much better rates that no other auto finance company could come close to matching.
Residential & Employment History
If you have good credit history and other common finance aspects are in order, this may not even matter. But lenders tend to like stability in people they give years-long loans to. Working at and living in the same places for extended periods displays that type of stability.
Advantages Of Getting Financing Through A Buffalo Chevrolet Dealer
Convenience is the most common reason customers go through the local dealer to get their new or used vehicle financed. But there are several others, including:
A Competitive Rate
Since the finance manager at your local dealer works with the same loan officers at the same banks every day, they will always be up-to-date on where the best deals are and what rates are running from one day to the next for various credit ranges.
Fewer Inquiries On Your Credit
This will lead to fewer banks and finance companies pulling copies of your credit report, which is already an advantage. Shopping for your own financing can lead to dozens of unnecessary inquiries.
Additional Insurance & Financial Coverage
Dealers offer various insurance and medical coverage packages for small amounts that can be worked right into the monthly note. They cover things such as if you have an accident not involving the vehicle, as well as other types of medical calamities. In some cases, it will pay the vehicle off should you become unable to fulfill the loan.
More Value In Auto Transaction
Financing through the dealership can offer other perks such as more for your trade-in, various service shop rewards like free oil changes or tire rotations, a lower price on the dealer’s vehicle, and many others.
Be Ready With Any Documents Or Paperwork That Might Be Necessary
If you think you might need things like proof of income/employment, proof of residence, bank statements, tax forms (for small businesses), or any others, it’s best to go ahead and gather them beforehand.
This will help speed up the financing process should the finance company require them. A nearby Buffalo Chevrolet dealer can help guide you through the next steps of getting an auto loan.
