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Financing a car may seem daunting at first, but with a little bit of knowledge (and maybe an auto loan calculator), you’ll have the upper hand when financing your next new or used car. Whether you’re looking to finance direct with a lender or through a dealership, these tips will help you find the best auto financing possible.

Tip #1: Know What You Can Afford

The first step when thinking about auto financing is knowing what kind of down payment and monthly payment you can afford. Make use of an auto loan calculator, like the one on the right-hand side of this page, to see how different factors impact your monthly payment amount.  Start by entering the estimated vehicle price, your down payment, trade amount and term.  Next, you’ll see an estimated monthly payment, total cost and amortization schedule. Most auto loan calculators will output your estimated payments at current rates assuming you have a “good” credit score.

But, how do you know what rate you’ll qualify for? For that, you’ll need to check your credit score…

Tip #2: Check Your Credit

In addition to getting an idea of what rate you can expect on an auto loan, checking your credit will also give you the opportunity to take care of any mistakes or blemishes that might be on your credit report.

Rates are always changing, but with an “excellent” credit score (740-850) you can expect rates of 3% or better. An “average“ score (680-739) will usually get you rates of 4-5% and a “sub-prime” score (below 680) will yield rates of 6% or more. If you find yourself on the lower end of the credit scale it doesn’t necessarily mean you can’t obtain an auto loan, your rates and payments just may be higher.

Bonus Tips:

• One way to avoid having to utilize a “bad credit” auto loan may be to have someone co-sign your loan for you.
• Weston Auto Gallery offers special financing programs for bad credit. No matter your situation, we can probably get you financed!  Click here to get started.
• Another way to minimize the effects of bad credit on an auto loan may be to make a larger down payment, which leads us to tip #3…

Tip #3: Put 10% Down

A down payment of 10% will yield you the best options regarding interest rates, payments and loan terms. Some lenders require a larger down payment on pre-owned vehicles, but that can work in your favor. You’ll see that when you enter a higher down payment into the auto loan calculator, your payments will be reduced, as will the amount of interest you’ll pay over the life of the loan. This can result in huge savings. Play with the calculator and try different down payment amounts to see how it will change your payments and the overall cost of the loan.

Tip #4: Shorter Terms = Lower Interest Rates

You usually have a choice of how long you want to finance your vehicle. When deciding how long you want to take to payoff your loan, always make sure you can easily cover your payment obligations; but also keep in mind that shorter terms usually come with better rates. In addition, you’ll end up paying less interest over the life of your auto loan. Typically, new cars can be financed for up to 72 months and used cars, depending on their value and age, can have terms up to 60 months. Just remember, the longer the term the more the loan will cost you in the long run.

Wherever you decide to obtain auto financing, don’t let the difficulties of an auto loan stand between you and the car of your dreams. Weston Auto Gallery offers a secure online credit application if you’re ready to get started today! Still shopping for that perfect car? Visit our online showroom to view our inventory.