For St. Cloud MN residents or anyone else ready to finance a car, you should first start with a good look at your finances. Determine how much money you can afford to put down on the car, how much you want to spend, and how much you can afford for a monthly payment. You should obtain your credit report and score from a trusted reporting agency. Look closely for any errors in your credit that should be cleared up before applying for financing, and see if there is anything you can do quickly to improve your credit score. Often times a credit card company can provide you with resources for free reports and scores, and tips to improve your credit.
Next, you should start shopping for financing before shopping for the car. There are many different places to start. Check rates (APR) at local banks, credit unions and even with online lenders. You may want to start with the bank you already have an account with as a starting point. Often times, credit unions offer better rates or incentives than a typical bank. Check with your employer, union, or other organization to determine if there are partnership banks or credit unions that may offer special membership discounts. And finally, ask some friends if they have found some good financing deals in recent months.
You should do some Internet searching as well. Check for online banks that might offer lower interest rates for qualified borrowers. Also look for borrower reviews (both good and bad) to avoid any mistakes or issues that others have reported. Before you head out to shop for your car, get a pre-qualification for the desired amount of money you are willing to spend on a car, and get a rate quote. This will give you more negotiating power in a sales deal. Finally, determine how long you want to finance your car for. You may be tempted to take a longer loan to have lower monthly payments, but you will pay more interest for the life of this loan. Determine how much you can afford to pay each month, in order to pay it off in the fewest years or months.
If you choose to buy a car from a dealership, negotiate the total car price, not monthly payments. It often helps to tell the salesperson, you already have financing and that you want to know the final cost of the vehicle.
Once you have chosen the vehicle and settled on a price, ask to speak to their finance specialist. Often times, dealerships offer special financing that may be better than any price you could have found independently. Allow the finance specialist to give you quotes that you can compare to your prior-researched quotes, and then you can make your best informed choice! Be ready to have the title to the car (if used), and your social security number, photo identification, and possible proof of income in order to qualify at any dealership or financial institution. In summary, shop for financing before you shop for the car in order to get the best deal!