How Can I Prepare For Auto Financing?

Preparing for auto financing can take a while, but it is not difficult. If you are properly prepared the actual negotiations and application will go smoothly.

The most important thing that you need to do to be properly prepared to be to order your credit report and score from the three major credit reporting services. No matter to which you may go for your auto financing will depend heavily on the report and the score. When you receive your credit reports check each of them out carefully and correct any errors that may be there and clean up any negative reports. When this is done you can make copies and take the credit reports to the dealership.

Do not decide on your auto financing with the dealership until you have checked other options such as the bank, credit union, or online financial institutions. The dealership may be convenient but beware of the sales push for add-ons payments that are made up of interest that is high in the beginning. The banks and the credit unions have competitive rates, there is no sales pitch and often provide a free life insurance or disability insurance with your auto financing. But they may not be a convenient as dealership financing. Online financing institutions have competitive rates, but they are not as personal and you have to be careful of scams.

The one option we have not mentioned is the home equity loan. With this option, you can deduct a portion of the interest from your taxes. However, there is a risk here as you are tying your automobile to your house.


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