Jefanie Genilla
Shopping for a family vehicle is already a major financial decision. More so if you’re planning to make the purchase with a car loan, which will affect your existing monthly expenses. As a wise buyer, you might like to lay out your options and identify the risks.
Experts from the world’s leading car and credit info sites like Edmunds.com and Credit.com advise car shoppers to anticipate the following risks when looking for a loan. These are the aspects that can make or break your shopping and eventually hurt your budget:
1. Obtaining a car loan – As they say, the first step is the hardest. Getting your hands on a good car loan deal is challenging and tricky, as you still need to shop around to compare prices. Besides, processing your documents might take a long time and you still have to wait if your application is approved or rejected. To make this easier for you, you can go to Loansolutions.ph and use the site’s 3-Step Online Car Loan Application. This will allow you to get your application details in front of many lenders, giving you access to a wide range of car financing options.
2. Your tunnel vision about loans – Don’t settle down with the first couple of loan offers you’re given. It’s wiser to shop around and negotiate to get a suitable deal.
3. Honeymoon deals – This refers to the overly low-cost offers dealers will give you during the first couple of years of the loan’s term. Honeymoon deals are just meant to help you adjust the monthly payments. After the specified adjustment period, the dealer will start to impose the regular cost of the loan.
4. The not-so-transparent dealer terms – Make sure to partner with a dealer who will discuss with you all the terms and conditions of your contract. Read the fine print and see for yourself if there are any hidden fees the dealer is not telling you about the car loan.
5. Hidden fees – Beware of unnecessary add-ons like auto protection, credit insurance and maintenance fees. If you think you can shop for these items on your own at a lower cost, ask the dealer or provider to waive these fees.
6. Penalties and additional fees – Find a lender that doesn’t charge you for making advanced payments. This will allow you to finish paying your loan ahead of time, hence reducing the overall interest rate.
7. Ability to make on time payments – Don’t get carried away with your excitement to finally own a car. Even before you start looking for a brand and car loan provider, reconsider your current monthly dues (e.g., school, rent, utility bills). Make sure that you can still pay them on top of your loan.
The point of anticipating these risks is that you’ll be aware of the possible traps dealers will throw at you in the process of negotiating the price. So if you like to stick to your budget and still get a good deal, it’s important to be prepared even before talking with a dealer.
