Car Buying Tips - What funding choices Are commonly Available for Auto Loans?



With today's economic climate, most people who buy a car will be funding the buy. For a lot of years, if one didn't have a good working relationship with their bank, they would just have to get the funding for their car from the dealer. This was very, very profitable for the dealerships. However, in the age of the Internet and information at our finger tips, there are a lot of choices for funding your new car buy that weren't available years ago. Here are a few conventional and a few unconventional methods and choices for funding an automobile buy (in no particular order).

Dealer funding

This is about the most traditional route for funding a new or used car. The dealerships have close relations with several banks that compete for their business. A few if not makes of cars own their own finance companies (Chrysler Credit, Honda Finance Corporation and GMAC - General Motors Acceptance Corporation).
As a whole, this isn't a bad option. Especially when dealing with the makers own, in-house finance company it can be a very good deal. This is where you'll find the 0% interest, no payments for 90 days and offers that traditional banks can't offer. Their rates of interest are very competitive also.

However, this option might not be right for you if your credit isn't great. It's just a fact that the worse your credit, the higher the interest rate will be. This is a situation where you'll need to shop around for funding to see if you are able to get a ameliorate rate somewhere else (see a few of the choices below).

Your Bank

If you've a good working relationship with your bank, then you might be able to just walk in talk to your banker and strike with the loan. Their rates of interest are usually competitive and there is also the convenience of having all of your banking and finance dealings at one place. Just look out for fees that they might charge you. A few banks have application fees, credit report fees et al. One nice feature of getting your auto loan through a bank is that a few banks will give you a 1/2% or even a 1% rate of interest discount for having your car payment automatically deducted from your current account.

Credit Union

A lot of times, if you've a credit union available to you, it's a perfect place to get funding for your new car. Since credit unions are smaller and more familiar your individual situation generally will carry more weight with the loan officers. In the past, credit unions were very exclusive for people in a certain profession (teachers, airline employees), but now a lot of credit unions are opening up based around other characteristics like what city you sleep in. To catch out if you've the option of joining a credit union, just do an Internet search for "Credit Union" and you should will be able to find possible credit unions that you are able to join. Again, like banks, you might be able to get a discount on your rate of interest if you've your car payment automatically from your account.

Online Lenders

If you do an Internet search "online car loans", you'll find pages and pages of sites that are offering to finance your new car buy. As with anything on the Internet, you've to be very careful in who you're dealing with. Just because they've a nice looking web site, it doesn't mean that they're legitimate. You are able to check the Better Business Bureau, or other online sites to find out if the company that you're thinking about getting your loan with. This can be a perfect option for those with not so perfect credit. Again, please do your homework on the company that you're dealing with.

Buy Here / Pay Here

When you r credit isn't very good and you can't get funding from any other source, the Buy Here / Pay Here car lot is a funding alternative that will get you in a car rather quickly. These car lots finance the cars themselves so they're the sole judge of your credit worthiness.

Basically when you buy a car from one of these lots, you'll be required to pay a few kinda down payment and make weekly payments right on the lot. The cars that they sell are mostly older cars with relatively high mileage. Which, if you need a car and can't find funding anywhere else, this should not be a problem.