Shopping for a new car is a famously stressful experience. From finding a new vehicle that fits your specifications to getting your financing and monthly budget in order, car shopping is often more complicated than it should be. However, if you plan, it may just be less stressful by the end of the process – and you will have the car you need.
Check Your Credit Report
Before you consider purchasing a vehicle unless you have cash in hand or the bank, check your credit report. Both your credit report and your income will determine how much you will qualify to borrow. It will also determine the interest rate for financing. When you check your credit report and believe that there are errors or fraudulent activity, have these errors fixed before applying for financing.
Find a Lender or Brokerage Firm
After looking into your credit score and credit report, the next step is to look into brokerage firms or lenders. You may apply with your trusted bank or an alternative lender such as a brokerage firm that works with a range of lending institutions. Options include large national banks, local banks, dealership financing, or brokerage firms.
You can read online reviews, ask around friends or relatives, and consult with the firm itself about their services.
Get Pre-Approved for Financing
When you find the right lender or lenders, you can then apply for pre-approval for your situation. Request interest rate quotes and offers from two to three lenders, and this will allow you to ‘shop around’ and ensure that you get the best rate. Each lender financial institution weighs the critical factors, such as credit score, differently, so you’ll want to consider each offer carefully.
It is important to remember the difference between pre-approval and pre-qualification. Pre-approval refers to a hard credit pull, which makes you a ‘cash buyer,’ and you will likely get the offered rate as long as the car meets the lender’s criteria. The pre-qualification process is a soft credit pull, and the offered rate is subject to change based on the full credit check.
Your Financing Will Set a Budget – And Perhaps, Your Vehicle
Once you get the appropriate financing and the pre-approval offers, set the maximum amount that you borrow. Considering taxes and fees, you can create a budget and narrow down the vehicle you can finance under the financing you’ve received.
Make a Deal
Of course, under the phrase ‘make a deal,’ you will find much more than an exchange of money and the ideal vehicle for your current situation. However, once you have secured financing and the car you are looking for, it is uphill.
Source: www.agmfinance.com.au
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