Getting A New Car Loan With Any Credit Situation

That old clunker of yours is just about due to give up the ghost but you are afraid to start looking for a new car. Shopping for the right new car is defined by most people as a major hassle. But the hassle is not so much in determining which car you want, since that is an easy decision for most customers. Most people are realistic about the kind of type of car they can afford, so they are not going to be looking for a Porsche or Lamborghini when they are fully aware that their budget says Camry or Taurus.

But if you have "less than excellent" credit, many lenders and car dealers make you feel like a second class citizen, almost sneering at you as they lead you away from that brand new Monte Carlo or Accord, and start leading you in the direction of that "slightly used" 1971 Nova on the used car lot of the dealership.

Let's face it, there are very few consumers these days who have perfect credit. Things happen, and you missed a couple payments on that credit card bill a few years ago, you paid for your son's braces on his teeth and were 30 days late with a mortgage payment three years ago, you got laid off from your job five years ago and missed a few payments, and so much more. But things are different now – you have a good job, a steady income, your son's teeth are straight and you are now keeping up with your bills on time.

One of the problems is that credit bureaus have a memory like an elephant, and these past circumstances are sure to come up as you investigate your financing options for your new car. That puts you on the defensive, requiring that you re-live those less than ideal times of your life that are long in the past to explain what happened, why it happened, and why it is no longer a factor in your current ability to repay a new car loan.

First of all, determine realistically how much you can afford for a new car payment. I mean, be realistic about it. Don't calculate that by saying you're going to eliminate the newspaper subscription, your cable TV, and not turn on any lights at night to keep the electric bill down. That is not realistic, and what will happen is that you will end up actually RESENTING that new car that required so many unreasonable sacrifices. If you are stretching your budget that thin, then perhaps a new car is not right for you right now.

You also need to be realistic about the amount of money you will receive from your trade-in. You can go online and see that the trade-in value for your current car is a certain value for trade-in, but be aware of how the car game is played. If it says that your trade-in should be worth $6000 as a trade-in, that is $6000 off the STICKER price of the new car, and rarely does anyone pay sticker price. It is a delicate balance, but the dealer will discount the new car perhaps $2000 off the sticker price to make you feel like you are getting a good deal, but then will only offer you $4000 for your trade. In case you did not notice, this is exactly the same as paying sticker price!

But let's assume that you have worked things out at the dealer, you have arrived at what you consider a fair price and are satisfied with what the dealer will give you for your trade-in. Now what? Now comes the part where you shop for a new car loan, which is almost as important as determining what kind of car to buy.

If your credit is good enough, you can frequently find a great deal on new car financing through the dealer, which uses the manufacturer's lending resources. The sweetest deal is a 0% finance rate, where every penny you pay goes against the principal. Some manufacturers are offering 1.9% or 2.9% interest rates, which are still much better than most banks and credit unions offer.

If your credit is less than perfect, you may want to investigate other financing options. Many of these lenders offer very attractive loan programs that are specifically designed for people with a few blemishes on their credit report. Some of these also have loans available for people with genuinely bad credit, or who have filed for bankruptcy.

The bottom line is that you need to understand that shopping for the right financing is just as important as shopping for the right car. Choosing the easy way without comparison shopping for financing could cost you several hundred or even several thousand dollars more than you need to pay. Do not underestimate the value of shopping for the right financing and be fully aware of all the options available to you.

For more information on how to find the best deal on a New Car Loan please visit our web site at http://www.car-loan-resources.com

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