Buying a new car is a fun, exciting experience, but it can also be stressful and confusing. Picking out a new car, choosing the perfect accessories, looking at paint and interior colors, and taking it for a test drive is thrilling. When all that is completed, however, the stress and confusion begins when it is time to sit down with the finance manager and handle the loan paperwork. Multiple fees, charges, additions, and subtractions blur together as you try to make sense of everything. Understanding a car loan is one of the first steps to saving money in the process.

It may not be as challenging to get a car loan as you think, especially with a “buy-here-pay-here” lot on just about every corner. But purchasing a car from one of those places means you will more than likely pay much more for the car than necessary. This is because they often charge very high-interest rates, some as high as 25 to 40 percent. The first thing to do when you decide to purchase a car is to set a budget. This doesn’t necessarily mean looking at how much you can afford each month but looking at what the car plus interest will cost once you have paid it off. Once you have determined how much you want to pay, review your credit report and score. If your credit is good, usually 675 or higher, you may have more negotiating power than someone with a lower credit rating.

The next step is to shop around for a car loan. The first place to start is your own bank. If you have a relationship with a bank, they are more likely to offer you car or truck loans at a good interest rate. Credit unions are another place to look as they often have lower interest rates available. A recent report by the National Credit Union Administration found that credit unions offered an average interest rate of 3.22 percent for a 48-month used car loan compared to banks who were offering 5.24 percent. Online lenders, including those offered by auto manufacturers, are another place to look. The dealership may also offer competitive rates to qualified buyers but be careful that they don’t add unwanted items as part of the financing. Once you find a lender who offers you the terms you want, request a pre-approval letter that you can then take to the dealer with you. It is possible you can negotiate even better terms with the dealer using the preapproval letter.

When trying to decide whether to lease or purchase a vehicle, you must take into consideration your personal taste and lifestyle as well as how much the lease or purchase will cost you in the long run. Car leases often have lower monthly payments and you don’t have to worry about owing more than the car is worth. Although you are responsible for regular maintenance, major problems with the car are often covered by warranty with a lease. You never have to sell a car when you lease and you can drive a new car every few years. If your credit is less than perfect, a lease may be easier to get. When you buy a car, you may have a higher payment but you pay less over time and you have the option to sell whenever you want. There are no mileage limits and no penalties if the car is not kept in pristine condition.

At the end of a lease, you may be given the opportunity to purchase the vehicle. Again, whether choosing to buy a vehicle you have been leasing is a good idea depends on your lifestyle. You need to read your lease contract to determine if there are any additional charges if you choose to buy the leased car rather than return it to the dealer. Once you have negotiated the buyout terms and value of the car, you will need to find the best place for auto loans for a lease purchase. Most leasing companies will push you toward their own auto loans for lease purchase but you can reach out to other lenders to determine the best rates. Some experts recommend letting the leasing company come to you. They will contact you about 90 days before your lease is up to discuss the terms. At that time, you can begin discussions with them about possibly purchasing the vehicle.

Having no credit can be as bad as having poor credit. If you are young and have no credit history, it can be difficult to get auto financing. However, just as some lenders offer car loans for bad credit, they also offer no credit auto loans for those just starting out. The best place to look for no credit auto loans is local banks and credit unions. These lenders often get to know their customers personally and are more likely to take a chance on lending money for a car because they have a relationship with you.

Your credit history is an important factor in getting approved for car loans and keeping your interest where you can afford it. The fact is that people make mistakes. You may have forgotten to send off a credit card payment or you may have medical bills you were unable to pay a few years before that have damaged your credit. You could have suffered a job loss, an illness or gotten divorced. Whatever happened to cause poor credit can lead to difficulty in getting car and truck loans. If it is possible to begin repairing your credit before you go shopping for auto loans, that is the best method. Pay off past due accounts, dispute errors and pay bills on time for several months before you apply in order to create a better credit history for lenders to see. In most cases, you may be approved for a loan but the interest rate could be significant. If it is just a few percentages higher than the average, you may need to accept the loan if you have to have a car right away but avoid any loans that have interest rates more than double the average. Some car loans for bad credit may be available if you can put a higher down payment on the car.

EmployeeandMemberDiscounts.com offers a wide range of discounts on car loans that can also help save you money on your vehicle purchase. You can find discounts on auto loans for poor credit and even an auto loan for a lease purchase. There is no membership fee and you can sign up for the site at any time. If you operate an organization, either for your employer or a non-profit agency, we can help you set up discount programs that include auto and truck loans.

If you are interested in buying a new car, visit EmployeeandMemberDiscounts.com today to see what is available. You can reach us by phone or fill out the easy form online to get more information. Whether you are looking for a standard auto loan, auto loan for a lease purchase or any other type of car loan, we can help.