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Four Questions to Ask When Financing a Car
| Written by yangying |
| April 08, 2008 14:22 |
1. Can you detail all the penalties and fees?
A favorite tactic of any lender-auto, mortgage or personal loan-is to bury an assortment of fees and penalties in the fine print of your car loan. Make certain you're clear on all the fees that are included.
The dealer may also include penalties for paying off the loan early. Try to avoid them if at all possible; they can be problematic if you decide to refinance the loan down the road.
2. What's the interest rate on the loan?
The most important factor in any financing deal is the interest rate. Ask the dealer for the APR (annual percentage rate), which is the best apples-to-apples measurement for comparing loans. Be sure to ask him how they compute their APR, because many lending institutions use different methodologies. You'll get a sense of exactly what a lender is including in the interest costs.
3. Can you get final approval on the financing package before you leave the lot? Finance managers love to tell you that the deal is approved, but then call you the next morning to say the financing has fallen through. Naturally, they'll have another lender lined up for you, although the interest rate will be higher and there'll be more fees attached.
Don't fall for this one. Make sure that the deal is set in stone before you leave the lot. If it's not, tell the finance manager you won't come back.4. What are the specifics behind the credit insurance? Including some sort of credit disability or credit life insurance policy with the loan is another revenue-generator for auto dealers. If you feel that you need one of these policies, ask for all the details concerning the coverage. Compare the policy with others on the market, and also check with your financial advisor to see if it's the right deal for you.
"Buyer beware" is good advice when dealing with a finance manager; but the above questions will do more than help you get your guard up. Armed with them, you'll be "buyer prepared." You'll send a clear message to the finance manager that you're nobody's financial fool.
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| German : Vier Fragen zu fragen, wann die Finanzierung eines Autos |
| Spanish : Cuatro preguntas a preguntar en la financiación de un coche |
| French : Quatre questions à poser lors du financement d'une voiture |
| Japanese : 4つの質問に資金調達が車を要請する |
| Russian : Четыре вопросы задавать, когда финансирование автомобиль |
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