Be on the lookout when searching for a car loan

February 20, 2013 12:00 AM

With so many hot cars coming into the market, drivers are probably being tempted by sleek rides from all corners. While you may want to dive right in and rush behind the wheel of a new vehicle, there are several steps you should take before you fork over the cash, especially if you plan on relying on a car loan to subsidize the cost. 

Know your financial basics beforehand
Before starting the purchasing process, prospective buyers should analyze their finances and determine where they stand. USA Today reports that drivers should know their credit rating so they can properly determine if they're getting a fair interest rate, and joining a credit union to see what are the average loan amounts and terms they can receive. 

Look into the cars
It may seem like a basic idea, but many drivers forgo doing research into potential models can give a solid knowledge base to begin the purchasing process. Look into which brands offer the best warranties or vehicle maintenance coverage, what the most dependable models are and what the average prices are for new or used automobiles. 

In addition to researching cars, buyers should also look into interest rates and loan options from different lenders. Not only can this lead you in the right direction, it can also provide some much needed leverage when negotiating a deal. 

Prepare yourself for the long-haul
Deciding on a car and settling on a loan can be tiresome. Today recommends eating a good meal before heading to a dealership and making an effort to get a refreshing sleep during the night. That way, when you head to the car dealership you'll be ready physically and mentally ready to handle a potentially long day on the lot, and you won't be distracted by a rumbling stomach or constant yawning. 

Similarly, drivers should be prepared to leave the car with the dealer until the loan has been finalized. Sales groups want you to become invested in the car before paying so they can drive up the price, and avoiding this trap is in the best interest of you - and your wallet. 

"During the purchase, customers often get excited with that new-car smell and may not listen or note that the deal isn't finalized," Marv Eleazer, a finance manager at a Ford dealership, told USA Today. "It's incumbent upon the dealer to strongly emphasize the car is being delivered subject to final approval with a written notice confirming the terms of delivery." 

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