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Financing a new car is not always simple. There are numerous reasons you might find your application for financing is denied, or you might just be worried that your application will be denied when it’s time to buy a new car. Worrying is not productive, but that doesn’t mean it’s easy to deal with. If you’re worried that you will have trouble financing a new car, below are a few tips and tricks that might help you ease your stress and drive your brand new car home.
One of the easiest ways to ensure you are approved for a car loan is through a down payment. How much you put down is up to you, of course. The less you need to finance, the more likely you are to be approved for a car loan. If your new car is $30,000 and you don’t think you can be approved for more than $25,000, you’ll need to put down at least $5,000 to make that car a reality for you.
It’s usually a good idea to buy a used car, as it does not depreciate as much as a brand new car the second you drive it off the lot. A car a model year old is one that likely still has low miles and very little time on the road, making it a reliable vehicle at a much lower price. Buyers can often afford to buy more car for less money when you consider going a year to two model years old.
Credit unions are in the business of working with their customers. Unlike big banks, credit unions tend to build personal relationships with their customers. Let’s say, for example, that you have a longstanding relationship with your credit union. Your credit is good, but it’s not great. You lost your job a few years back and your finances took a major hit as a result. While a big bank might see nothing beyond the numbers, your credit union might see you as a bit more.
Your credit union might see that your low score is a result of job loss several years ago. They might be more willing to lend you money since they can see that your bills have been paid on time without issue for the past year or two. They know you and your history, and they are more likely to work with you on a car loan even when another lender will not.
It’s not the best idea to take out a loan for a brand new vehicle with a long term of more than five years. While it does make a vehicle more affordable in terms of payments, it makes it far more expensive in terms of out-of-pocket expense. However, if you cannot garner approval for a loan based on the monthly payment amount, see if you can extend the loan a year or two to lower the payments significantly and put that vehicle within your budget. Contact a dealership like Rebel Ford for more information depending on your situation.
If you are worried you cannot buy a new car because you will be denied a car loan, there are options, even if you have less than perfect credit. You can obtain a co-signer if you can find one. You can save up a bigger down payment, or you can shop around for a good loan from someone other than the dealership’s lender of choice.