According to a recent Automotive News article, auto sales are expected to increase slightly around the U.S. in 2015. One main reason for this is that interest rates are expected to remain relatively low for the rest of 2015. Low interest rates and longer auto-loan terms have largely offset higher vehicle prices over the past few years, keeping increases in monthly payments to a minimum.
Our friendly representatives at Community Financial can help answer any questions you have about the vehicle loan process. To help you be as prepared as possible, here are a few things you might want to do before you visit the dealership:
- Visit our Auto Resource Center – Use Community Financial’s Auto Resource Center to research vehicle pricing, compare models, view dealer inventory and estimate your payments.
- Know your credit score – Knowing your credit history will give you a better idea what to expect from lenders. The Fair and Accurate Credit Transaction Act of 2003 (FACTA) allows every consumer to get a free copy of his or her credit report once a year from each of the three major credit-reporting agencies (TransUnion, Experian, and Equifax).
- Know the invoice price – Once you’ve settled on the right car for you, look up the invoice price for that car in a Buyer’s Guide. Invoice price is what the dealer pays the manufacturer for the car; the manufacturer’s suggested retail price (MSRP, or “sticker price”) includes hundreds—usually thousands—of dollars of profit for the dealer. With the exception of all-new or very popular models, you should be able to get a new car for closer to invoice than MSRP.
- Get pre-approved before negotiating a price – When you are ready, get pre-approved for a low-cost auto loan and know your budget before you shop. This will help the process run smoother when you find the right deal. You don’t need to know the exact price or make and model you plan to purchase, but having a pre-approved loan will make the negotiating process much easier.
- Don’t forget insurance – you will also want to contact your insurer to price out insurance costs for your vehicle. This will not affect the loan process directly, but will help you better manage your budget for a purchase. Some insurers offer discounts for annual or bi-annual payments, which could make your insurance more affordable.