Beware These Car Credit Deals
It’s not a secret that when it comes to the automotive world – and it’s financing – it’s a buyer’s market. Between bankrupt automakers and desperate car dealers looking to get their extra inventory off of the lot, now has never been a better time to pick up a new car – especially if you need to apply for car credit to do so!
However, like with most shopping, it’s important to look out for these “too good to be true” deals, which often might not be the best option for you, especially if you’re looking to finance your purchase. Here are the deals you’re likely to see, and why you should avoid them at all costs:
Buy One Car, Get The Second Free. Sounds like a great deal, right? You can purchase one vehicle, and the dealer will throw in another car for absolutely free! This might appear to be a great deal at first – especially if you have a large family that will benefit from the second car – but don’t sign that contract just yet. Dealers won’t let you choose your second car; as a result, they’ll often give you a car that doesn’t sell well, like an SUV or gas-guzzling truck. Additionally, that second car isn’t necessarily free; dealers will attach hidden fees to your loan application to ensure that they get some financial return. If you’re paying for the first car with the dealer’s car credit, you’ll be hit with a high-interest rate loan to cover the costs of your “free” second vehicle.
Car Credit At Low-Interest Rates. Dealers are starting to get desperate – and many of them are offering car credit loans at rock-bottom interest rates. Does this offer intrigue you? Before you head out to your local dealership, be warned: you’ll need a perfect credit score in order to be approved for this offer. Besides, these attractive loans are often only available with only certain vehicle models, which means that your dream car might not be covered by this deal. To get the best deal on your car credit, apply for competitive loans from your bank or lender before approaching the dealer for financing. This way, you can ensure that you’re getting the best loan rate for your credit score.
Drive Off The Lot. Many dealers are promising potential customers that they’ll be approved for car credit on the spot, meaning they can drive off of the lot that day. Yet if you peruse through the fine print, you’ll see that the terms of the loan can change – and you might see your interest rates go up only a few weeks later.
To avoid this sneaky trap, be sure to get another loan offer from a third-party lender before you approach your dealership for car credit financing. Don’t forget: never let your dealer know that you’re looking to drive off of the lot with your dream car. You want to have all of the power in your negotiations!
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