Buying a car is an enormous commitment. You’re likely to be making payments for years to come but it’s always important to remember you aren’t locked in until you sign the papers. Before you sign on the dotted line, it’s best to know what you’re getting yourself into. Knowing what type of loan you’re signing up for can make the difference between a good deal and a bad one.
Knowing what kind of contract you’re signing and who holds the vehicle title until you’ve paid off the loan is important. If you have problems, they’re the ones to call. Be sure to compare interest rates, charges, fees, and length. They can make all the difference when buying a car!
Direct Lending is when you get a loan from a bank, finance company, or credit union. When you accept this type of loan, you’re financing the amount of the car plus a finance charge. The advantages of direct lending are knowing the credit terms in advance and having the ability to shop around for the best deal.
Dealership Financing is similar to direct lending except you’re financing through the dealership itself. While many dealerships sell the contract to a bank, finance company, or credit union, they could choose to service the account and collect payments themselves. Advantages of dealership financing include convenience (location and hours), multiple financing options, and special programs (manufacturer-sponsored, incentives, low-rate).
What to Bring To a Dealership When Buying or Leasing a Car
Buying a car is an exciting process until you get to the negotiation stage. All that financial gibberish and paperwork is a major hurdle for anyone who’s just looking to drive off the dealer lot to show off their new set of wheels. However, you can streamline this process by being prepared ahead of time and bringing everything you need to the dealership the day of the transaction.
First, do your homework in advance when it comes to getting an auto loan. Go to your bank, credit union, or other financial institution to get preapproved for a loan, which will tell you what amount of money and which interest rates you qualify for. Plus, get something like a blank check that you can bring with you, which both you and the dealer will both sign. You can do this even if you plan on financing with the dealer; it’s good to know all of your options.
The basics are up next. You should definitely have your license and proof of insurance with you. Of course, these are things you should always have with you anyway while driving, but it doesn’t hurt to double-check.
Also, if you plan on trading in an old vehicle, make sure you have the owner’s manual as well as the used vehicle’s current registration and certificate of title. You also should provide all of the old car’s sets of keys. Lastly, don’t forget that if you ever have questions about anything in the car-buying process, the experts at Schaumburg are ready to help!
Much like renting a home, when you lease a car you pay little to nothing down and have smaller monthly payments. However, there are often specific terms, and you can’t keep the car once the lease is up.