How to Find the Right Car Lender

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When buying a new, or new-to-you, car is on the horizon, it’s critically important to find the right financing option for your purchase. Choosing the wrong lender could mean thousands of dollars spent on a very large purchase that you might have been able to easily avoid. A little bit of homework, well before you ever set foot at a dealership, can help to alleviate this very common problem. Remember, dealerships almost always offer some type of in-house financing program. But, they don’t always offer the best terms. You can consider their program as a last resort if you don’t find anything better, but never consider it as a first option before you do a little leg work.

 The first thing you’ll need to do is estimate the amount of money you’ll need to borrow to purchase the car you want. You can head over to Cars.com to estimate the cost of the car based on make, model, trim, year and more. If you have any down payment funds saved, you can factor that against the total amount that you will need to borrow. You will also need to remember to include costs for sales tax, car title and license which are often rolled into the transaction at the dealership.

 Finding the right car lender begins with knowing what your options are. You might have a great relationship with a local bank in your community where you’ve had accounts in good standing for years and where you actually know people who work there. Submitting a car loan application here will mean personalized service and decisions made by people who actually know your name. This level of personal service can afford the bank some flexibility in approval, but their standards and criteria are usually among the highest in the banking industry. Large national banks also award car loans everyday. Their application is probably a whole lot less personal and likely begins with an online process. It’s also probably pretty black and white with little room for flexibility on rates based on your credit criteria and financial profile. If you belong to a credit union based on where you work or live, these institutions are among the best for car loans. Unlike the big banks they aren’t in the business of making big money. Instead, they focus on providing services to their members. Oftentimes, you can find the best interest rates available at these institutions and should be where you start.

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