How to Finesse Auto Loan Financing

Buying a car is probably one of the biggest personal financial decisions you will make. What you buy and drive says something about who you are as a person from the heavy-duty Hummer to the crazy copper Cooper. Cars and financing packages are as distinct as the owners who finagle them. Here are some basic tips and tricks on how to get your auto loan.

First, make sure your credit report is spotless. If necessary, take out a debt-consolidation loan to payoff other outstanding balances. You will need employer or income information handy, references, checking and savings account information, and try to gather as much of a down payment as you possible can afford. I have known people with shady credit who were financed by in-house money with the dealership who put up the financing themselves based strictly on where the purchaser worked because the dealership did business with the boss or the purchaser's company.

Second, if you are paying cash - flaunt it - and ask for all the perks thrown in free include cash-back bonuses which can be applied to the down payment. Make sure you get the interior, color and options you want and do not be so eager that you settle for what is on the lot. Any reputable dealer will find, ship and even personally deliver your car if the deal is by cash. You can make it a cash deal by using your credit card, however, ask the dealer to run it as a retail purchase and not as a cash transaction to save on the credit card fees. A lot of people do this to earn frequent flyer miles, cash-back bonuses, or other incentives offered by the credit card companies. Mastercard and Visa will somewhat ensure your purchase. Another option is to get a loan from your employee credit union, usually a lower interest rate than dealerships offer. The trick is to ask in the loan application for twice what you really want to borrow. If your credit worthiness is anything at all, they will at least offer to loan you half and maybe all you ask for in the loan. They will think you are settling for less, but you will be getting what you actually needed for the car in the first place.

Third, many Chevy and Ford dealerships offer their own financing, like GMAC (General Motors Acceptance Corporation). They offer optional insurance programs and other warranties along with the loan. They might be able to offer a longer and extended term loan, waive the first month's payment or even defer billing for a month or more, but my suggestion is to take as short a term as financially possible. This is because a newer car will depreciate faster than the payment plan. By the end of six years, with finance charges, your car may be worth less than what is owing, depending upon how hard you drive the car and its condition at trade-in time. For the same reason, I would suggest not taking out a lease unless you are able to take the expense of your automobile off your taxes as a business write off and that includes the mileage.

Fourth, know your stuff. Research what the actual cost of the vehicle should be and comparison shop. Do not accept any additional add-ons you do not need and did not ask for during negotiation. You can ask that they help you provide insurance and credit life/disability is a good idea. You can ask that the tax, license, shipping, undercoat or any other outside expenses be included in the total loan that is being financed. Use CarFax, check the glovebox for papers, test drive the car and check all the electrical and interior areas. If a used car is missing a wheel cover or the tailgate is not lifting properly, make sure they fix it before taking delivery of the car. Even a small part like a wheel cover can cost a lot of money you should not have to pay yourself out of pocket. Be honest with the salesman about what you need and stick up for what you really want.

Fifth, work for the dealership or find a family friend in the business. Insiders get special breaks and see the trade-ins when they come in and can pick them up at a little over cost. Many larger dealerships have satellite used car outlets where they move less than best used cars. Ask your employer if they will help you finance the car if your job requires that you travel a lot for business, pick up and deliver products or people for the business or otherwise need to make a presentation using your car, for example, as an insurance or real estate agent.