Authored by Jenny Mango in Automotive, Loans
Published on 02-15-2009
Getting a loan for first time car buying individuals can be difficult. First time car buyers may not have demonstrated their credit worthiness yet, so they may find it difficult to get a loan with a good interest rate. First time car buyers may also find themselves paying higher monthly payments than those who have purchased vehicles in the past. The higher interest rates push up the total purchase price of the cars, making monthly payments more expensive. In order to combat the problems associated with buying a car for the first time, you need to look into your options and research which is the best one.
Research Car Models
In order to get a loan for first time car buyers, you need to pick a car model that is not going to be too expensive, or else your interest rates, along with your car insurance, will be too expensive. Lenders will not want to give you a loan for first time car buyer if you are going to be paying the loan along with rent, insurance, and other expenses. Asking for a loan on a $30,000 car will probably get you denied if you are a first time buyer. You should also avoid looking for the cheapest car possible. Lenders know that you will be more likely to make your payments on time if your car is in good working order and you are not stuck paying huge mechanic bills on a regular basis.
Look for Deals
If you need a loan for first time car buying individuals, you should look for special deals offered by car dealers and lenders. Dealers may offer their own financing programs, which can help you avoid having to deal with a bank or lending company. If you do have to work with a bank, you may be able to negotiate lower interest rates or other special deals.
Gather Your Information
In order to get a loan for first time car buyers, you will need to provide your lender with information about your income and expenses. Be sure to have copies of your recent pay stubs or your most recent tax return available when applying for a loan. Your lender may ask for copies of this information in order to verify your monthly income.
Put Money Down if Possible
Many people are drawn in by no money down deals that promise to let you drive off the lot without spending a penny. However, every $1,000 that you put down on your vehicle can result in up to $25 off your monthly payment. Additionally, putting nothing down on your new car means that you will be paying interest in order to cover your vehicle tax and registration. This is not ideal if you are getting a loan for first time car buyer individuals. Put as much money down as you can so that you can get a lower monthly payment for the life of the loan.