Auto Loan Purchasing Guide

Are you in the market for another car? Buying a car is the process of determining what car is best and how to pay for it.

5 Easy Steps to Follow:

1) Let’s SHOP! What can I afford to buy?

a. Start by searching the internet for a website like… “https://www.bankrate.com/loans/auto-loans/auto-loan-calculator/,” which will show the latest car loan interest rates and supply a loan calculator program.

b. Write down the current auto loan interest rates (average) and terms (how many years the loan is for).

c. Use the Online ‘Bankrate’ auto loan calculator and Enter: -an estimated price of cars that you were interested in; the term of the loan (years), and the average auto loan interest rate (taken from your notes). Compare the result of the loan payment to your budget. Is this affordable?

d. If so, proceed to Step #2 below.

e. If not, plug into the Auto Loan Calculator, a lower price to see how much your budget can afford.

2) Find the Right Car- make and model that you like, need, and can afford:

a. Write down (or make a mental note) the attributes (things you like or need) in a car. For instance, it must have 6 or more seats; should be 5 years old or younger; Less than 70,000 miles; white or gray (remember black has higher insurance); and have an automatic transmission… to name a few suggestions.

b. Now search for these attributes in make and models on the internet through websites like Dealerships, Carvana, and especially Kelly Blue Book. Write down as many as you can find – be careful to write the make and model, year, and PRICE…of all you are interested in.

c. Narrow your selection and list only the car Make/models within your price range and area.

d. Now, do another, more comprehensive search, on the internet for these cars. Use websites such as Kelly Blue Book to know how much the car should really cost.

e. When you find several cars on Kelly Blue Book-PRINT this out! You will bring this printout with you when you go to a bank for financing and again, when you purchase the car.

3) Go to the BANK! Time to get the Financing and pick out the bank and interest rate:

This is the most important Step in Buying a vehicle. The loan will determine what make/model, and how much money you can afford.

a. Prepare your documents by obtaining a copy of last year’s Income Tax Returns (Joint or Head of Household). Also, retrieve your latest couple of months of payroll stubs.

b. You will need a copy of the car’s make/model, value, and year that you saved from Step #2 to give to the bank.

c. Go online and search for a copy of your credit report:

You can get a free copy of your credit report from each of the three major credit bureaus, Equifax, Experian, and TransUnion. Consumer Financial Protection Bureau:

Where can I get a credit report?
Online: Visit AnnualCreditReport.com. Phone: Call (877) 322-8228.

Don’t worry if you can’t get this score – your bank will do it for you. It is important to know if the bank is giving you a fair deal and using the correct score.

d. Look up the Federal Credit Unions, Employer Credit Unions, and local banks in your area.

e. Search on their website an offers of Auto loans and their interest rate (if they will provide it).

f. Choose the best options and call that bank for an Auto Loan Financing appointment. The bank will then approve/ qualify you for a loan and tell you how much you can afford, the terms, and interest rate.

g. The bank will now process your loan and provide you with the information to go and buy your new (newer) car! You won’t need to negotiate, dicker, or argue interest rates or terms at the dealership!

h. You may need to repeat Step #2 to match your approved auto loan amount with a car that matches your needs.

i. It may be necessary to shop around. Keep in mind that many Auto Manufacturers, like Toyota, Subaru, and Ford, can offer very competitive financing on new-to-used vehicles. You may have to look at several different Dealership offers, Federal Credit Unions, and Banks for the best deal. It’s very important to compare the best deal, terms, and conditions, to make a choice of which bank to finance your auto loan through. So, don’t get discouraged – keep shopping until you find the best deal.

j. When you have finalized your Auto Bank Loan proceed to Step #4.

4) Time Let’s Make a Deal!

a. Assemble a folder with the paper from your bank stating how much you qualify for (If it is through the dealership – no need – just go to that dealership).

b. Put a copy of the car’s value – Carvana, Kelly Blue Book, into the folder – use the latest printout.

c. Now find your car – let the dealer, seller, whoever, know that you already have financing and that you know the price of the make/model that you are looking for.

d. Take your Stand!!! Even if the dealership tries to dicker-don’t fall for it! You already know that you can buy it for this price. It may be necessary to go to a different dealership selling the same make/model. Don’t be afraid to walk off the lot if they do not match the sales price and conditions that is stated on your papers.

(I have in the past approached two different Subaru dealers on the same day for a brand new model – the first overstated the price and tried to offer me different financing-worse than the printed Subaru Financing offer that I held in my hand. But the second Subaru dealer was spot on and even gave us a better model for the same price we wanted!)

e. Be persistent and only agree to terms to buy the car you planned and for the financing and price you already have agreed to beforehand.
Don’t be a marshmallow! You WILL get the deal you want…

5) Satisfaction Guaranteed! What a Beautiful Car we have!

You are now the proud driver of the right car -for the right price -at a payment you can afford!