Sometimes you need a new car sooner rather than later. You can’t wait to save up a larger down payment. You don’t want to drive an expensive rental car until you can secure a car loan. Here are a few tips for securing your new car quickly.
Find a Lender Who Can Help You Fast
The best solution in this case is to find an auto lender that doesn’t take a few weeks to approve a car loan. London is known for quick car loan approvals. Then you can buy a car as soon as you pick it out and sign the paperwork. This can save you a lot of time compared to trying to drum up the cash or repair your credit before you apply for a car loan.
Know What You Can Afford Before You Go Shopping
You can save everyone a lot of time by knowing in advance how much you can afford to pay. Total up your savings so you know how much you can spend on a down payment and all associated fees. Create a budget, and determine how large of a car payment you can comfortably afford. Remember to factor in costs like auto insurance, gas and tolls. Once you have that number, don’t take out a car loan with a higher total monthly payment.
When you know that number, you should see it as a hard limit. If a car offer is bumping against the limit, start negotiating. Can you get a lower interest rate? Can you extend the loan by six months or a year to lower the monthly payment? Which cars on the lot are cheaper and fall under the maximum you’re allowed to spend? Can you get more for your trade-in to fall under this threshold?
Know Your Backup Plan
You have no negotiating power if you feel like you’re trapped until you drive away in a new car. Know your backup plans before you apply for a car loan or try to buy a car. For example, know where else you could apply for a car loan if the dealer offers you an unreasonably high interest rate. Better yet, have other financing offers on the table so that you can compare financing terms. They may offer you better terms simply because they know you don’t have to go with their loan. Understand what else you could to do get by. If you know whose care you can borrow while you save another few hundred dollars to put down on a car or shop for a cheaper vehicle, you won’t feel the need to sign the first contract that is offered to you. If you already have a family member willing to co-sign for the loan, you can share this information with the lender if their initial financing terms are too costly.
Avoid Compounding the Debt
If you walk into a lender’s office and say you have to roll over your “negative equity” into the new car loan in order to buy a new car, you may have just increased the odds of them rejecting your loan application If they approve the loan application, then they make up for the greater risk by charging you a higher interest rate. They may tack on a fee for the loan consolidation while they’re at it.
What is the alternative? Research your options about paying off the car you want to replace without compounding the debt you owe. This could be selling it in a private sale and applying for a loan with the local credit union for the difference, while the car loan for the new vehicle is only for that outstanding balance. For a modest difference between the value of the car and the remaining loan balance on it, can you pay it off with the cash you have on hand? Have a few options lined up so that you don’t have to worry about negotiating the value of your trade-in. Furthermore, these options may include trading in a few toys so that you minimize the size of your new car loan.