3 Car Loan Mistakes You Don’t Want To Make

When you’re serious about buying a car, you need to look into the different ways you can finance your vehicle. Auto financing can come from a wide range of sources including credit unions, auto dealerships, and banks.

However, before you go about seeking ways to secure an auto loan, it’s important that you avoid making some of the most common mistakes motorists make. Here are three common mistakes motorists make when trying to secure an auto loan and what you can do to avoid them.

1. Not looking into all of your options. Many motorists stick to taking out auto loans with their local banks while others use credit unions. But it’s a good idea to shop around so you can investigate all of your potential lending options. Don’t be afraid to look into financing comparisons.
2. Thinking with your heart, not with your head. It’s good to go with your gut in certain situations, but when it comes to securing an auto loan, you want to go with what your head is telling you. You want to make sure that you’ve done your research upfront so you know which car you want and how you’re going to pay for it. Do you want a passenger vehicle that’s 20-times smaller than a commercial truck or do you want a larger, family-sized SUV? Are you choosing to take out a bank loan to finance your vehicle because it’s the best deal or because it’s what was recommended to you by a friend? Ask yourself these questions so you can feel confident in your decisions.
3. Not reviewing your credit ratings before you apply. Your credit score can change a lot over a period of time. The last thing you want to do is go in asking for a car loan without knowing what your FICO score is. Access your credit report as soon as you know you’re going to be shopping around for a car loan. This way you’ll be able to tell what your car dealer is looking at and they can’t tell you that your FICO score is lower than it really is. You can also ask about any errors that may be involved with your FICO score beforehand rather than later when you’re applying for a loan.

It’s important to do your research when you’re looking to secure an auto loan for a new vehicle. By avoiding the mistakes above, you can finance your car without sweating the small stuff.