Finding a car for the first time can be overwhelming. After all, it would be best to decide what you’re looking for, find a dealership that has it in stock, and then negotiate your way through the price. On top of that, you also have to figure out how you’ll pay for it!
1. You Get a Lower Interest Rate
The interest rate you’ll get at the dealership is higher than that from a bank or another auto loan provider. Dealerships have to work with skinny profit margins, so they are likelier to leave money on the table than a bank. New Roads Auto Loans offers a rate for new car loans about 10% lower than the rate you’d get from a traditional bank. So you’ll be saving a lot of money in interest payments.
2. You Won’t Lose Your Car If You Change Your Mind
Let’s say that after negotiating a fair price, you decide that maybe this is not the car for you after all. At any point before the sale, if you choose that this car isn’t for you, most dealerships will take it back and give back your down payment without any problems.
3. You Get More Options
Dealerships want to get you in a car as quickly as possible. They don’t have time to work with you to figure out the financing situation. If you go to a bank, that dealer has lots of time to ensure that your credit is good enough for financing and works hard for you to get the best deal possible.
4. Your Trade-In Value Will Be Higher
A dealership will make money if they turn your old car into something they can sell to someone else. It isn’t bad business practice for them to hold onto your trade-in value if it doesn’t make sense for them or if they don’t need it anymore. You may be able to get more money if you work with a bank on the trade-in instead of a dealership.
5. You Can Purchase the Car That You Want
Many people are nervous about getting into their first car because they don’t want to be stuck for the long term. It can be especially true for young people who don’t have much money and aren’t sure how they will finance their future cars yet. If you work with an online bank, you’ll be able to move on after two years and not have any regrets about the choice that you made now, when your financial situation is different than it was then.
6. You’ll Be Able to Save Money on Your Insurance
If you go to a dealership and ask them to quote you basic car insurance, they may come back with something costly for the coverage you want. While this isn’t necessarily bad, it is an opportunity for you as a consumer. You can choose from many kinds of car insurance, and you can get a reasonable rate if you shop around. An online bank will be able to give you quotes from several companies so that they can find the best price for your situation.
When you’re ready to get a new car, ensure your financing situation is handled well before you head to the dealership. Once you know what kind of interest rate you’ll be paying and what loan terms are available, there will be no surprises during the buying process.
