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 Financing a Car Online
Whether you buy a car online or in a traditional dealership environment,
the Internet is an excellent source of comparisons for the financing. You can get up-to-date rate quotes easily,
compare lenders' offers, even handle the entire process online. Saving money on the car loan is just as important
as saving on the car purchase (and if you are not careful, it is easy to get swayed into a financing program that
is either too expensive or does not meet your needs).
Whatever you do, don't just accept the financing plan that's offered by the dealer. At the very least, you should
have your financial planning done before you begin price shopping for vehicles. With a couple of the online lenders
available such as Capital One Auto Finance, you'll
actually have your check in hand before you visit the dealership, allowing you to shop as a cash buyer (and keeping
the financial negotiations out of the equation).
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Online Car
Financing
Resources
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Capital One Auto Finance offers
loan response in minutes, competitive rates and their "Blank Check"®
is in your hand as early as the next day. |
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Hints and Tips on Financing a Car Online
  Check your credit upfront. Many financial institutions determine interest rates on a "tier" basis.
The better your credit, and the more "in-line" the price of the car is in relation to invoice (on a new
car) or book value (on a used car), the lower your financing rate will be. It is a good idea, then, to make sure
your credit report does not have mistakes or omissions before the bank sees it. Consumer Info offers a free copy of your credit report.
Compare
against your local bank and/or credit union. After you have made
your online comparisons, make your offline comparisons. The advantage of your local bank is that there is the possibility
of a personal relationship with your banker. The disadvantage of a local (and smaller) bank may be an uncompetitive
rate. If you have the availability of a credit union, the advantage here is the convenience of having your car
payments deducted from your pay. The disadvantage is that you are tapping what may be an unsecured line of credit
for a car--meaning what would normally be an easily accessible loan from your credit union (if, for example, you
ever needed for an emergency) may no longer be available to you.
Home
equity loans have become a popular way to finance a car in recent
years. The advantage is the possible tax deductibility of the interest paid on such a loan. To get comparisons
of home equity loans, you can visit a source such as Quicken Loans Home Equity Loan section.
Note: The IRS will only allow you to deduct interest on a loan amount that does not exceed the value of your home,
for good reason. Borrowing in excess of your home's value is not recommended.
Dealer
financing may or may not be the best option for you. The single
advantage of financing a car at the dealership is convenience--you buy and finance the car at the same place. The
main disadvantage is the variation of interest rates, since the difference between what the dealer "sells"
you the financing for and what they "buy" it from the bank for, is their profit. This is why it is so
important to do your comparisons before you enter the dealership!
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