When it comes to purchasing a car, there isn't a one-size-fits-all solution. All buyers have different needs. However, there are certain things that all buyers should avoid doing in order to protect themselves and their finances. Here are just some of the mistakes you want to avoid.
Not Being Open Minded
Smart buyers will often search for and secure financing before they even head out to the dealership. There is absolutely nothing wrong with this practice, but make sure you keep an open mind when it comes to financing options the dealer might be able to offer you. In many instances, buyers will only look to their banking institution for pre-secured financing.
Auto dealerships have access to a countless number of lenders. Additionally, many of the finance managers at dealerships like Western Avenue Nissan have the leverage to work closely with lenders to help secure a deal that might be better than what you already have.
Borrowing From 401K
Some buyers think they're doing themselves a favor by borrowing from their 401K to minimize the amount of their auto loan. This does more harm than good. First, you're taking away from your nest egg. In the event of a crisis, you will no longer have this additional money to rely on.
Secondly, it's often cheaper to finance, especially when it comes to buyers with good credit. Good credit buyers have access to low or zero interest loans. When you take money from a 401K, not only do you face tax penalties, but you're also required to pay back the loan at an elevated interest rate.
Failing To Check Credit
When it comes to auto financing, your credit is one of the most important factors. Don't make the mistake of failing to check your credit before completing a financing application. Some people assume that just because they pay their bills on time, they have good credit.
However, credit cards with high balances or a limited history can both affect you negatively. Lenders look at your credit as a method of assessing risk. The lower the score, the greater the risk. The reality is that a credit score can literally change from week to week. Keeping a watchful eye on any changes is best so that you can address the concern and secure the best interest rate.
Avoiding these mistakes can help get you in the car of your dreams while also keeping more money in your wallet. Make sure you are being a smart buyer.