Pros and Cons of Auto Financing

What is the importance of the financing and insurance room?

Con #1: Some people ignore the financing and insurance room.

Car buyers have their mind on one thing – driving home that sparkly new car! You don’t want to be bothered with financial details. Well, when you start making those monthly payments you will have wished you paid more attention!

Pro #1: Focusing on the financing end of the deal

The main point of buying a new car is to drive that baby home! But, ignoring the financing could cost you a bundle. Don’t think about the financing as dreaded paperwork. Think of it as your money. Will you spend it wisely or throw it out the window?

Con #2: Puffed up interest rates

The interest rate you pay has a lot to with your credit score. But, if the dealership inflates that rate, they profit and you lose. Beware – know your score and how much you should be paying!

Pro #2: Find your own lender

The solution is simple – don’t let the dealership arrange your financing. Find your own financing through your bank, credit union or some other source. Put your financing in place before heading out to the dealer. This puts more power in your pocket!

Con #3: Make sure you know your credit score

Many consumers will blindly apply for a loan without even knowing how much they can realistically borrow. Know your score. Know your rating. It is simple enough to get a copy of your credit report before you ever ask for one penny.

Pro #3: Get your credit report

There are several websites that can give you a copy of your credit report. Some sites will charge for this, but you are legally entitled to get your report for free. Make sure the report is accurate and beware of identity theft!

Bottom line

Several other pros and cons affect the bottom line of car buying. These include taking full advantage of rebates and discounts. Know which is best for you. Understand your budget and stay within your financial means. Don’t get sucked in by temptation or a smooth talking salesperson. Be savvy, be studious and you can get yourself a great car at a price you can afford!

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