Are you considering financing a car? Don’t go into the process blind. Here are some important tips to know from David Agee, Financial Director at Adamson Ford in Birmingham.
What It’s All About
Before we throw you into a list of tips, we’ll answer one very important question first: what is financing?
Financing is borrowing money from a lending institution (example, a bank) with a promise to repay that money back over a set period of time. In other words, financing is the fancy way of saying you are borrowing money and will pay a monthly charge.
1. Know Your Credit Score
What’s your credit score? Dum…dum…dum…
There’s a lot of pressure riding on this question. Why are credit scores such a big deal?
“Credit scores are very important. Your score determines the level of risk borrowers take in order to secure a loan.”David Agee, Finance Director, Adamson Ford
The good news, according to Agee, is that there is no specific credit score required to purchase a vehicle. Phew! However, your score does make a difference in several ways, including:
- Amount of loan
- Length of loan
- Interest rate
- Monthly payment
Credit scores work like this. The higher your score, the lower your interest rate. In other words—the better your score, the less money you’ll pay out of pocket.
Knowing your credit score and interest rates available can help you negotiate a good deal and even save you money. Cha-ching!
Where can you find your credit score?
- Visit websites such as AnnualCreditReport.com, CreditKarma.com or MyFICO.
- Check with your credit card company. Many offer free access to your credit score as a benefit of having a card with them.
Here’s where your credit score lies:
- 300-500—Very Poor
2. Shop Around
Shopping for a car is no quick task. It requires hours of research and several test drives (luckily that part is usually pretty fun!). If you spend such a hefty amount of time choosing the right car, why would you spend any less time shopping for the right automotive loan?
There are all sorts of automotive loans out there. The objective is to find the loan with the most favorable terms and the lowest interest rate. So, while you’re shopping around for the best car, be sure to do the same to find the best loan.
3. Compare Prices
When shopping for a car, you’ll notice that not all dealerships sell vehicles for the same price. This is why Agee says comparing prices is very important when financing a car.
Not only does the price of a car affect which auto loan you may be approved for, but it also impacts the interest rate and monthly payment. You do want the best deal don’t you?
Along with checking prices at dealerships like Adamson Ford, you can also use reliable tools like Kelley Blue Book to help determine the value of that special ride you have your eye on.
Financing in 4 Steps
Financing a vehicle may sound like a mega ordeal, but the process is actually quite simple.
- Choose the vehicle you want.
- Get approved for a loan.
- Pick an affordable payment plan
- Repay lender
You don’t have to do any of it alone, either. Agee and all members of the Adamson Ford team are there to help you through the financing process. Trust me, when buying a car, a little assistance goes a long way!
For all your automotive needs, Adamson Ford has your back! Visit them at 1922 2nd Avenue South, Birmingham, AL 35233.