If you are ready to buy your first car, but do not have the cash to pay for it outright, you will have to take out a loan from a bank or credit union. Now, this does not have to be a bad thing, but there are some important things you should know about auto loans for first time buyers so there are no surprises when you start the process.
What to Expect as a First Time Car Buyer
When you have decided what car you want, the first order of business is getting it financed. This can be done in many ways. Often times, the car dealership you purchase the car from will have first time car buyer loan programs for students, teens, and other people with little credit or job history. Take a look at these, and then compare these rates and terms to those you can get at your local bank. Pick the one with the term and interest rate that gives you a monthly payment that you can afford. Remember that shorter loans will lead to a higher monthly payment, but will often have a lower interest rate so you will end up paying less money in interest over the course of the loan.
As an alternative, you can apply for first time buyer auto loans through our service. We have literally hundreds of lenders and dealers in our network, many of whom have special financing programs for the first time buyer. Instead of spending days or weeks trying to get approved for financing through local lenders, you can get approved online.
Tips for Getting a Better Rate
Since you are a first time buyer; you might not qualify for the best interest rate. There are some things you can do, however, to get the best interest rate possible. As was mentioned earlier, try to get a loan for a shorter period of time, as these will have lower interest rates on average. Another thing that can help is buying a newer car with lower mileage. Banks and credit unions are normally willing to give you better interest rates on these cars because they are less of a risk to finance. However, this does not mean that you should go out of your budget to purchase a newer car. Stay within your budget and shop around for the best deal. This way you can be sure you are not settling for a car and could possibly have a case of buyer’s remorse in the future.