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What you'll get from this auto financing guide: Online car loan rates from FirstAgain.com (for people with an excellent & substantial credit history), Up2Drive (a division of BMW Bank of North America), AutoCreditFinders (for people with lesser credit) and CarsDirect Car Loans How to increase your chances of approval on new car loans or used car loans How to get a bad credit auto loan, new car financing for people with bad credit Auto loan refinancing tips to lower interest rates on your current car loan How to get your Credit Report and cleanup your bad credit before new car financing All about credit unions, bank financing, new car loans, used car loans & avoiding car loan scams Read this entire page, start to finish before you do anything DO NOT apply for a new car loan until you get your credit report WITH credit score! Top car loan questions we receive: Jeff, I heard on the news that nobody can get a car loan because of the financial crisis. Is this true? As everybody knows, the credit markets are very tight right now. I've been getting a lot of emails lately from people who have good credit but are having trouble getting car loans. While the credit market has tightened, you can still get a loan to buy a car especially from online companies that specialize in car financing like FirstAgain.com (for people with an excellent & substantial credit history), Up2Drive and CarsDirect Car Loans. If you don't have perfect credit AutoCreditFinders is a good option even if you've never had trouble getting loans before. Don't take it personally, all of the banks are clamping down on lending and a service like AutoCreditFinders or CarsDirect Car Loans may work to get you a good loan at a low rate. In these tough financial times it is more important than ever to follow my tips to get the best deal with the lowest interest rate. Some dealerships might take advantage of the situation and put you in a loan at a higher interest rate than you deserve. Make sure you arm yourself with your credit report with credit score from Experian, Equifax or TrueCredit before you go car shopping so you know where you stand. Of course the best weapon you can use to keep from being taken advantage of is to have financing for your car in place before you walk into the dealer through a lender like FirstAgain.com (for people with an excellent & substantial credit history), Up2Drive (a division of BMW Bank of North America), AutoCreditFinders (for people with lesser credit) and CarsDirect Car Loans. If you're unable to get a loan from one of these lenders, don't forget that the credit union at your workplace is a good resource that might be able to help you out in these trying times. Jeff, I just got ripped off on my car loan interest rate by the dealer! What do I do now? Don't email us! Do something about it. Visit Up2Drive where you can refinance your auto loan immediately with lower rates. If you have excellent credit and a substantial credit history, you can refinance at FirstAgain.com. For more details about auto refinancing, visit our auto refinance section. For online car loans, how much should I apply for if I don't know the cost of my car yet? How do I pay the car dealer when I finance my auto loan with an online lender? You can't decide between the Toyota Camry or Honda Accord, but you do know the sticker prices. While you are car shopping apply for your auto loan online. If your car has a sticker price of $25,000, you just apply for your car loan seeking $25,000 plus tax. The online car loan lenders approve you up to that amount, and they FedEx you a blank check which you are authorized to fill out at the car dealer up to your approved amount. Whatever amount you write in that blank check becomes your car loan amount, usually a number much less than you applied for. So you see, it does not matter what the final selling price of the car is, it will likely be less than your car loan approval amount. So haggle your best deal at the car dealer, and with your down payment, you'll be way below your pre-approved auto loan amount. This allows you to secure your auto financing a month before you buy your car, then you just endorse the check over to the dealer when you buy your car. You do not need to know the final cost of your car when applying for your car loan, so apply now at sites like Up2Drive and FirstAgain.com. You need to be pre-approved for auto financing before you ever talk to a car dealer to avoid scams and get the lowest APR. Biggest new car financing mistake car buyers make The biggest new car financing mistake buyers make is trying to buy a new car without checking online auto loan rates or knowing if their credit history can support getting an auto loan. A big source of emails we get are from people with auto financing issues, whose new car loans fell through at the dealer. Buyers see 0% APR ads, but can't get the cheap auto loan rates, as they were unaware of their low credit score. Applying for new car financing without knowing your credit score is the dumbest thing a new car buyer can do. Use our car loan payment calculator tools to play on even ground with car dealers.  Don't just get the free annual credit report, they are useless without the credit score, which you must pay for. Go to the sites we recommend below and buy the 3 bureau reports with the credit score option. If you have bad credit and are trying to get an auto loan... Looking for a bad credit auto loan? You should read our chapter for people with bad credit: Bad Credit Auto Loans, Tips and Scams To Avoid. We give you the strategies for people with bad credit, tips to increase your credit score, how to increase your chances for approval on a new or used car loan, sites that can help you get a bad credit auto loan.

New Car Finance Money Saving Tip

If the manufacturer offers you additional rebates in exchange for you financing through the manufacturer, then you should take their car financing. Then once you have the rebate and received financing from them, go refinance your car loan online to a lower rate through Up2Drive or FirstAgain.com. To learn more, read our Chapter on Auto Refinancing Tips & Scams.

New car finance Rule: Don't trade in a car that you still owe money on

I get complaints from people who traded in a car they owed money on for new car financing and 2 months later were shocked to hear the new car dealer did not pay off their car loan in 10 days as promised. With this scam dealers pay you less for your trade. When the bank calls, YOU are responsible because the old car loan is still in your name, until the dealer pays it off. If you trade a used car in for new car loans, make them put in writing they'll pay off your trade in car loan in 10 days. If they refuse to put it in writing, walk away from the deal.

Watch out for dealers using the FICO Auto Industry Option score

Most car dealers run your FICO Beacon credit score and report from the big 3 credit bureaus: Equifax, Experian, and Trans Union. However, some car dealer finance managers instead use secret software available only to dealers (not you) from Equifax, that generates what they call a "FICO Auto Industry Option score." You cannot generate this score or report on your own, or buy this report either. This auto industry option credit score is different from your normal credit bureau score. It's based on your auto buying history, your car payment history, repossessions, etc. If you are a first time buyer or have no previous auto financing on your credit report, you'll score low on this one even if you have an excellent FICO Beacon score.  This angers and confuses responsible buyers who whip out their own 3-bureau report showing squeaky clean credit yet they still get rejected. Some lenders just don't want to lend you money for a car if you have no prior car loan.  It stinks, there's nothing you can do about it, don't ask me what to do, just move on to another dealer. This is another reason you should apply with an online lender first so that you have a "yes" in your pocket before you hear the dealer's "no". Your "yes" will trump their "no" every time. Personally I think this type of credit score is an excuse to charge you a higher APR for those who do squeak by, because this Auto Industry Option score is almost always lower than your standard FICO credit score. I firmly believe your excellent 3-bureau credit score should be the testament of your ability to pay your bills on time, but with these dealers your argument falls on deaf ears. Move along to another dealer.

Beware of dealers using no-name credit bureaus to run your credit score

The whole lending world and most car dealers use the big 3 credit bureaus to run your credit report and credit score, so why should the one car dealer you visit be any different? We get complaints from people with their own 3-bureau report already in "The Folder" showing their high credit score, then the finance manager tells them "we use a different credit bureau", and gosh darn, your score is way lower with this off brand bureau, so they are going to have to charge you a higher APR. I smell a rat. If the dealer you are haggling with does not use one of the big 3 bureaus and their "credit bureau" produces a credit score lower than the standard industry accepted normal credit bureaus, then you should leave immediately. They don't deserve your business.

How your credit score affects your auto loan rates

People with bad credit pay higher auto loan interest rates. It can hurt your job prospects, insurance companies check your credit too. Get your credit report instantly online, it's a must for The Folder. Get it online at Experian, Equifax or TrueCredit. Remember, you can run your own credit file all you want, but if dealers run it for new car loans, then your score drops a bit, and credit bureaus try to treat all of them as one hit if it's inside 30 days. If your score is < 550, don't apply for new car loans until you learn how to repair your own credit at our other site DebtWizards.com. Your last auto financing resort is a bad credit auto loan. Some lenders run your credit score, as well as an Auto Fico score, which is an indicator of your past history with car financing. If you have no car financing in your past, some prime lenders will reject you.

Online Auto Loans: Getting the lowest Auto Financing Rate

According to the Consumer Federation of America, car buyers are often overcharged by 3% on their loans at the dealership, which can add $1000 to the life of their loan. Your best sources for new car financing are auto loan sites such as Capital One Auto Finance (who I used in 2004 and it was smooth as silk. Read How I Saved $5500 Buying my new 2004 Lexus GX470 SUV for more info) and FirstAgain.com. With the lowest online auto loan rates, they usually beat dealers, no application fees or down payments. Your new car loan is approved in minutes. Get your online auto financing quotes, compare to dealer auto financing, use whoever has the best car loan interest rate. Online auto loan rates are the standard for dealers to beat. Use online car loan payment calculators and choose your best auto financing. For people with questionable credit who apply to Capital One, if they can't approve you, they hand your application over to their sub prime lending partner who may be able to approve you.  If this happens, you'll see both inquiries on your credit report, but bureaus treat it as one inquiry for your credit score.

Car Loan Tip Of The Month With paperless car loan, FirstAgain.com deposits money directly into your checking account as soon as today Low rate for buyers with an excellent and substantial credit history only. FirstAgain.com introduces the nation’s first paperless consumer loan experience. FirstAgain’s AnythingLoan is an unsecured loan that eliminates fees or pre-payment penalties; it allows you to have funds in your bank account as soon as the same day. You also avoid the hassle of title and lien issues because this loan is unsecured. Approval takes only minutes and you don’t have to wait for a check to arrive. You no longer have to deal with car dealers scamming you with, "that lender’s check will bounce" or telling you, "we don’t take their checks, they take too long to pay." The AnythingLoan allows you to be a cash buyer as soon as today! With low fixed rates, the AnythingLoan is ideal for dealer purchase as well as lease buyouts or person-to-person purchases. The AnythingLoan can be used for any new or used auto. In fact, it can be used for anything you like including home improvement, timeshares, motorcycles, boats and RVs, education, or medical expenses. This type of loan is only available if you have squeaky clean credit. What you Need for loan approval: Five or more years of significant credit history (Click Here To Get Your Credit Score). A credit history with a variety of account types (i.e. major credit cards, installment debt and/or mortgage debt) An excellent payment history with no delinquencies or other problems repaying debt obligations. A proven ability to save. How First Again works: Apply online at FirstAgain.com for the amount you need to buy your car, boat, timeshare or home improvement (or anything else). Get an email about your loan application within minutes (during business hours). If approved, sign your loan agreement electronically online, choose your funding and monthly payment dates Funds transferred electronically directly to your designated bank account. Go pay for your car, RV, education, medical expenses or anything else! Click Here to Visit FirstAgain.com

Did you put down less than 20% on your new car? You better consider gap insurance

If you put down less than 20% on your new car loan, you should get Gap Coverage from GapInsuranceQuotes.com. Most people refer to it commonly as "gap insurance", and most insurance brokers don't even know what it is. Don't bother buying it from car dealers, they mark it up big time to a retail $500-$700 price, then finance it into your new car loan with a high APR reaping even more from your wallet for the next 5 years. The good news is you can get Gap Coverage at the "wholesale level" online directly from GapInsuranceQuotes.com for less than 1/2 the car dealers, bypassing the car dealers. If you owe $20,000 on your car, and it's only worth $16,000, you're upside down. If you total the car, or it's stolen, your insurance company gives you $16,000, you must come up with $4000 immediately to pay off the bank, plus you have a $500-$1000 deductible from your car insurance company! Gap coverage protects you against this. The better ones cover up to $500 of your deductible as well.

I'm paying cash, why does the dealer want me to fill out a credit application?

Dealers tell people it is required by the Patriot Act to monitor cash. It's one of our Top 10 Car Dealer Scams. Many businesses dealing in large amounts of money are required to bounce your name off the OFAC list to make sure you are not a banned person. But it does not require a credit check to do this, they do not need your SS# to verify your name, all they need is your name. Some buyers tell me they convinced the dealer to relent.

Know Your New Car Pricing Before You Go Car Shopping!

Visit online car buying sites and research car pricing. Read reviews in Chapter 2 of car pricing sites like InvoiceDealers, Cars.com, Yahoo!Autos, Autos.com, Edmunds.com, MyRide.com and CarsDirect who get you competitive price quotes, car pricing, dealer cost and rebates.

Best New Car Loan, Used Car Loan Sites Where to check online auto loan rates
Up2Drive (a division of BMW Bank of North America) offers highly competitive rates and superior customer service. Up2Drive financing is not available to first time car buyers. Once approved, Up2Drive will send you a "Drive CheckTM". The Drive CheckTM works similar to a personal check and can be used for Private Party Purchase, Refinance or Dealer New/Used car purchases. You can negotiate the sale price of a vehicle as if you have cash on hand. Check today's online auto loan rates Lock your rate for 30 days. Never an application fee. Click Here to Visit Up2Drive	FirstAgain.com online lending for people with excellent credit. What you Need for loan approval: 5 years of excellent and substantial credit history with no delinquencies, with a variety of account types (credit cards, mortgage, auto loan). Minimum FICO Credit Score of 700 (Click Here To Get Your Credit Score). How First Again works: Apply online at FirstAgain.com for the amount you need to buy your car. Get email about your loan within minutes (during business hours). If approved, sign your loan agreement electronically online, choose your funding and monthly payment dates Funds transferred electronically, directly to your designated account. Go pay for your car. Loans are completely paperless and unsecured. Click Here to Visit FirstAgain.com	Due to the credit markets being tight enough to turn coal into diamonds, people that used to have no trouble getting car loans may be having a hard time getting one. Services like AutoCreditFinders were originally designed for people with poor credit but these days they can help people with good credit that are having trouble getting a loan. Auto financing for people with lesser credit: If your Credit Score is below 680 and you're rejected, don't submit apps that keep getting you rejected. Submit one free application to a bad credit auto loan site like AutoCreditFinders, that finds bad credit car loans. They can find you car financing from high risk underwriters. Even if you have a discharged bankruptcy, tax liens or bad credit. You may pay higher APR. If your credit score is 550 or above, your chances are good, also you should be working at least 6 months, no bad credit last 6 months. If you have good credit but get rejected elsewhere for no car loan history. Click Here to Vistit AutoCreditFinders

How to get bad credit auto loans

If your Credit Score is < 600 don't submit loan applications that get rejected, dropping your credit score even further. Apply to CarsDirect Car Loans or AutoCreditFinders, they find "bad credit car loans" for you. They get you new car financing from high risk lenders, with decent online auto loan rates, even with a bankruptcy. If your score is > 550, no bad credit for 6 months, AutoCreditFinders Bad Credit Auto Loans can help you establish credit with lower online auto loan rates than dealers. If you had bad credit in the past, but now you make more money, you'll find you are cash rich, and credit poor. Then a bad credit auto loan might be your only hope. They connect you with a car dealer near you who can get you financed. Sometimes if your situation is really bad, you don't have a choice on cars or dealer brands, and you might have to work out the auto loan first, and choose your car second.

Warning about car dealer low APR new car financing, few people qualify

Estimates show that as few as 7% of you will qualify for those low APR auto loan rates we see advertised by car manufacturers. Some low APR car loans require a credit score over 700 to get that rate and most require 36 months to pay off the loan. Many of you cannot pay off the auto loan in 36 months, so you may be forced to pass on the deal. Your best bet is to assume you won't qualify, and get quotes from Capital One Auto Finance, Up2Drive and FirstAgain.com so you are prepared. If you do qualify for the low promotional APR car loan and can handle the payment terms you'll save but if you don't qualify or can't handle the terms you'll be prepared.

"Subject To Financing": why the dealer called you 2 weeks later to re-sign your auto loan
New car financing at the dealer can be a headache. The "Subject to Financing" clause appears on paperwork of all new car loans. It means the deal is not done, yet you think you are signing a contract. Then 2 weeks later the car dealer calls saying "your new car loan fell through." They knew what you qualified for when you bought the car, a common auto loan scam, usually pulled on people with bad credit. You should not buy a new car first then worry about new car financing. When you buy a house, you MUST have approval first, so have your car loan in order before car shopping. Use online auto loan sites such as Capital One Auto Finance, Up2Drive and FirstAgain.com. The lower online auto loan rates avoid these scams. Sometimes dealers call and say they found you a lower APR. Oh, Really? Have them fax you over all the new figures and APR in writing, and make sure they did not increase the number of months. Otherwise do not re-sign any contracts. We are big proponents of online new car loans. Don't get stuck with bad credit auto loan if it's not necessary. This would have been avoided if you used online auto financing.

Used Car Loans:

If you plan to purchase a used car from a dealer - Capital One Auto Finance, Up2Drive and FirstAgain.com (if you have an excellent and substantial credit history) provide used car loans for buying from a car dealer. Apply online and get approved today. Capital One Auto Finance will FedEx you a check. FirstAgain.com will wire the funds directly to your bank account. You become a true cash buyer and avoid all the paperwork hassles. Your Capital One Auto Finance loan Annual Percentage Rate (APR) will vary based on the model year of the used car purchased. The newer the used car, the lower the APR. Capital One Auto Finance provides you with a table of model years and APRs. In some cases you will actually save money by buying the newer more expensive used car at the lower APR. I helped my friend Jerry buy his used Lexus RX300 and had him apply at Capital One Auto Finance. They approved him and he got his check the next day by FedEx.

If you plan to purchase a used car from a private party - Up2Drive and FirstAgain.com (if you have an excellent and substantial credit history) provide used car loans for buying from a private party. Up2Drive will send you a "Drive Check^TM". The Drive Check^TM works similar to a personal check. You can negotiate the sale price of a vehicle as if you have cash on hand. FirstAgain.com will wire the funds directly to your bank account. You become a true cash buyer and avoid all the paperwork hassles.

Car loan payment calculators
We have a car loan payment calculator for you in our Free Excel Spreadsheet Download Area. Our car payment calculator is easy to use, with 4 loan scenarios on one 8x10 printout, allowing you to make quick decisions about your auto loan. You can also find auto loan payment calculators online at Capital One Auto Finance and FirstAgain.com. If you have a PocketPC type PDA, download our Car Loan Payment Calculator for Pocket Excel. Use our spreadsheets to compare online auto loan rates to the car dealer auto loan rates. Many people have told me they used our spreadsheets on their laptop or PDA to catch the car dealer cheating on the car payments. New car financing just got easier for you.

Keep your debt to income ratio and credit balances low
It's crucial before you attempt new car financing, to get your credit balances way below 50% of your credit limit or they lower your credit score. You pay on time but can still have a low credit score if balances are too high, you applied for credit recently, or have too many open accounts. This surprises many people applying for auto loans who get rejected. Get your debt to income ratio below to 0% if you can, otherwise banks stick you into a bad credit auto loan.

"bad credit" car financing credit score scam
This happens often with new car financing. One buyer told me his score was 780 from 3 credit bureaus. He applied for auto financing at the Chrysler dealer. Four sales guys came out of the finance office with a bogus "credit score" of 580 circled in red. They lied that with his bad credit they could get him financed at 10.9%, not at the special 2.7% auto loan interest rate. It's New car finance trickery. He pulled out his own credit report showing Equifax at 780, why is theirs is 580? Three salespeople scattered, the last guy lied that credit agencies show better credit scores to consumers than to lenders. The buyer left, buying his Chrysler elsewhere at 2.7% APR. For people with bad credit, this scam works perfectly, suckering you into a bad credit car loan.

Warning about Low APR auto loans (0%, 1.9%, etc.)
Usually low APR rates like 0% or 1.9% are offered to few people with perfect credit, on new car loans typically 12 to 36 months. According to J.D. Power, only 7% of new car sales in 2003 took advantage of these low teaser rates, and 10% in 2002. Most of you planning 48 or 60 month auto loans, or used car loans won't get 0%. Ads say "with approved credit". You either get the low car loan APR or rebate, not both. Calculate which is cheaper. It may be better to take a large rebate over the 0% APR new car financing. Compare to online auto loan rates. Pay off your auto loan early, saving on interest. Applying the rebate and using your own low-interest financing often gets you greater savings.

Which is better: a rebate or special new car financing?
Use this auto loan calculator to answer this riddle. Also, the table below shows a real world example, where you are buying a new car for $19,287, and trading in your old car for $2,000. It compares side by side the 0% APR auto loan with a higher 4.39% APR auto loan, and shows that even with a higher APR, the rebate saved the most money. Crunch the numbers for your case and see which is best.

Your Deposits And Down Payment
Never pay cash for a deposit on new car financing. If the deal goes south, at some dealers, you'll never get your cash back, but you can dispute a credit transaction. If You need a new card for deposits, and have good credit, try the Discover® Platinum Card or the Discover® Student Card, both have no annual fee.

The VIN Etching scam in the finance office
Dealers slip in a $300-$900 fee for VIN# window etching into your new car finance paperwork, lying that you won't get the auto loan without it, "the bank requires it". You can order the same kit used by car dealers online from [an error occurred while processing this directive]. Some dealers lie that the VIN etch was free, yet it's padded in your payment.

Bad Affect Of Low Credit Scores on your new car financing
Your credit score determines your new car loan approval and APR. If you have bad credit and score is low, you'll pay high car loan interest rates, up to 23%, with a bad credit auto loan. If your score is below 720, you might not get those special 0% new car financing rates. Your bad credit score affects how much you pay for car insurance rates. People with bad credit have no clue about this, maintaining your credit score should be an ongoing process, not a rush job when financing a new car. That's the worst time, banks will reject you if you have disputed items on your credit report, until it resolves. It can take 60 days to clean up your credit score, so don't apply for new auto financing until all disputes are resolved and you verified your FICO Score. You have been warned! I have seen people rejected for applying while "in dispute." Then they get stuck with bad credit auto loans.

Credit score myths: "I've never missed a payment. My credit score must be high!"
Many people get upset at auto loan time when they find out their credit score is low, and they have bad credit. Paying on time is but one of 100 variables making up your credit score. Having many open accounts will damage your credit score, as there is potential for you to spend up to your credit limits. People with good credit have too much credit and old accounts no longer in use. When I got my score it was ok, but by closing half a dozen retail store cards no longer in use, I improved my credit score almost 40 points. Having credit account balances above 50% of the credit limit quickly degrades your score, meaning higher auto loan interest rates and bad credit auto loans.

How to increase your car loan approval chances

• If you're a recent college grad, don't apply for new car loans until you're at your new job at least 6 months
• Your monthly income must be over $1600 otherwise you have no business taking out a loan, buy a used car instead
• It helps if you have a past auto loan in your credit history. Some lenders may reject you if you don't
• Apply online at auto loan sites like Capital One Auto Finance or FirstAgain.com who don't play games with online auto loan rates
• Learn how to repair bad credit yourself, get your credit score to 680 before you apply for new car loans
• Pay down your credit card balances as low as possible, payoff higher APR cards first before applying for auto loans
• Don't apply for new car loans if you have bad credit, moved in the last 6 months. Lenders hate nomads, they verify addresses & income
• Get a stable occupation like engineer, architect, finance, etc. Self employment is very difficult to get approved
• Haggle with creditors to get charge off's, late payments, other black marks off your credit report before auto financing

Credit card companies say it takes 60 days for paying off your credit cards to show up on your credit report, but who wants to wait 2 months before buying a car? One of our visitors filed a request for investigation of her report stating that the balances on these cards were incorrect, and the investigator looked up her correct balances. She checked 2 weeks later and it was changed. Also, by paying off 2 credit cards from 70% max credit level down to 0%, increased her credit score 100 points. That's the difference between paying 6% APR for a new car loan, and 21% for a bad credit auto loan.

Steps to take before you apply for new car loans:

• Get your Credit Score from all 3 bureaus so dealers can't lie to you about your score. Flash it in their face when they lie to you about your score
• Start comparing online auto loan rates to new car dealers, use car loan payment calculators
• Close old credit accounts, they are excess luggage dragging down your credit score, but leave your oldest account open
• Remove erroneous previous addresses and other errors off your credit report before attempting new car financing
• Wait until your score goes up to 680 if applying for lowest rate car loans

New car dealer financing is just a product the dealer sells you. Is it an auto loan or not a auto loan?

New car loans at the dealer are not really new car loans, nor used car loans. They are Retail Installment Sales Contracts (RISCs). Great acronym. The dealer sells the RISC to a bank, often sharing interest rates, so the higher APR they charge you, the more money they make. Unless there is a subsidized low APR from the car maker, you'll usually find lower online car loan interest rates at online new car financing sites like Capital One Auto Finance, Up2Drive or FirstAgain.com. Now you have lower online auto loan rates. In the 1990s, we HAD to get our auto financing at the dealer. New car financing is just a product the dealer sells you. You don't have to buy their convenient product anymore. You should never put yourself in a position where you rely on a new car dealer to tell you how good your credit is, you should be telling yourself instead by understanding your own credit report. This way you avoid their bad credit auto loans. Subject to new car finance.

Don't Be Fooled By Lower Monthly Car Loan Monthly Payments

When auto loan shopping, look beyond monthly car payments. Sneaky dealers quote a lower monthly payment than your bank, but the dealer's auto loan might be 72 months, and your bank's auto loan is 36 months, a common scam, to get you into a bad credit auto loan. Some dealers lie about APR on their auto loans, but plugging numbers into a car loan payment calculator exposes the lie. Auto financing is a cat and mouse game. Always verify their numbers, make sure monthly car payments match the selling price and APR that you are expecting to pay. If you can't check their numbers, you have no business taking out an auto loan! You have the right to know how much new car loans will cost including interest rate, trade-in value, taxes and fees, all disclosed in writing. But there are people selling you new car financing who don't want you to know how much you're spending, and divert your attention by pointing out low monthly payments you are comfortable with. The same happens with used car loans. Always car loan payment calculators to verify car loan interest rates and payments.

The Straw Purchase car loan, don't do a co-sign!

This is the dark side of auto financing. A straw purchase refers to a person buying a handgun for someone who is ineligible to own one. That's how the Columbine High School shooters got their guns. With new car buying, the dealer tells you that with bad credit, you can't qualify for the auto loan so you need a co-signer. No problem, Grandma will do it for you. But Grandma is duped by the dealer paper shuffle and 2 weeks later you find out there is no co-signed auto loan, they wrote the auto loan in Grandma's name! This does not help your bad credit. Her name is on the title, and it's illegal for you to buy insurance on a new car that is not titled to you. This is pulled a lot on used car loans also. I hear Texas has laws against Straw Purchase auto loans. How To Avoid The Scam: Have both signers present, auto loans should have both signatures together. A notice to the cosigner is required by the Federal Trade Commission's Trade Regulation Rule on Credit Practices. With bad credit you should try a cheaper used car, with a used car loan.

Good Sources of Online New Car Financing

For discount new car buying we recommend sites such as InvoiceDealers, Cars.com, Yahoo!Autos, Autos.com, Edmunds.com, MyRide.com and CarsDirect. You can save even more with online car financing. The easiest way to get pre-approved for an auto loan is a credit union or trustworthy online auto loan sites such as Capital One Auto Finance, Up2Drive, FirstAgain.com and AutoCreditFinders. Before you buy a car you must have auto financing ready. Once you are pre approved by the new car financing sites, compare online auto loan rates to the dealer's APR. If the dealer can beat your online car loan APR, with no cash flow shell games, finance through the dealer. Otherwise use online new car loans. Banks charge a bit more for used car loans, than new car loans.

Advantages Of Auto Financing: Online new car loans and used car loans

Benefits of new car loans from an online auto loan company:

• Online auto loan rates from sites like Capital One Auto Finance, Up2Drive and FirstAgain.com are usually lower than car dealers
• Low APR, No app fees for New Car Loans and Used Car Loans
• Online car loan payment calculators, your auto financing APR is locked for 60 days
• Online new car financing avoids headaches, bad credit auto loan scams, and frustration of car dealer auto financing
• Auto loan approvals are usually within an hour during business hours
• No new car finance hidden fees, points or prepayment penalties with online new car financing
• New car loan lenders FedEx your check to arrive next day
• When you buy your car, give the dealer a bank draft from Capital One Auto Finance, Up2Drive or FirstAgain.com online auto loans

Extended Warranties
As with financing, you must shop for extended warranties before you buy your car so you can compare with the dealer's warranty pricing. For an extended warranty, try WarrantyDirect. I Review WarrantyDirect in detail in the section on How To Buy An Extended Warranty And Avoid Scams. You'll want to get an online warranty quote before you go to the dealer, so you'll have something to compare the dealer's extended warranty price with. Never show up at a dealer to buy a car without a free quote from an online warranty site.

Alternate Auto Financing: Credit Unions

Credit unions are easier on you than car dealers for new car loans or used car loans, they'll lend you more money at favorable auto loan interest rates over dealers, give more favorable benefits than leasing companies. Your credit union can approve you over the phone in minutes, printing your credit report during the call. They'll tell you what auto loans you qualify for. I have found often the online auto loan lenders rates beat credit unions. Some credit unions don't require a lease security deposit, down payment, other fees, and are generous with lease mileage.

Equity In Your Home Can Fund Your Car Loan
If you have equity in your home, find a home equity loan for down payments with no fees. You can usually deduct interest from home equity loans from your taxes, effectively reducing your APR. Don't borrow more than 75% of your equity. Home equity loans are usually 2% or higher APR than car loans. They might be higher APR than used car loans too. But is some cases the tax savings make up for the higher interest rate.

Lease Calculators
Read our guide on using ALG Residual Values. You'll need it to calculate your auto lease payments, and look up dealer cost for cars and trucks. Every person leasing autos should use the same type of auto financing tools that new car dealers use. Without it you're sailing the ocean of confusion, and they'll swallow you whole. I would never lease a car without using lease software. Fight fire with fire.

Get The Credit You Deserve
New car dealers know that almost everyone has a bad mark on their report, and they make good use of it with higher APR auto loans. Erroneous black marks on your credit file cause you to have a bad credit rating and pay higher auto loan rates.

• My friend found 3 errors on his credit report that kept him from getting approval on his new car loans until they were fixed
• My sister moved, the electric company never sent her last month's bill, causing a bad charge off on her credit report

What's on your credit report
Your credit report appears online, and shows who has checked your credit history. Some sites lure you with "free" credit reports, but you must sign up to their paid credit monitoring service to get it. Errors in your credit file put you at a disadvantage when the dealer calls 2 weeks after the sale to say "your new financing fell through, you have bad credit, we need more cash". Then you are stuck with their 21% APR bad credit auto loan, all because you did not do your new car finance homework first.

TIP: When filling out the forms for your credit report or anything else online, remember to enter your full email address properly! If your email address is forgetful@aol.com, don't just put "forgetful", you must add the full "forgetful@aol.com" or your request will be denied. They need to be able to email your report to you as a backup. Also, have your drivers license handy, you need the Drivers License #.

Don't Just Borrow Your Way Out of Debt!
Consolidation loans are DANGEROUS, because you shift all your debt from one place to another, OPENING A NEW CHANNEL OF CREDIT, while freeing up your credit cards. Some idiots proceed to fill up their credit cards again, now they have double the debt they started with, paying up to 22% on their consolidation loan because they weren't paying attention to the APR. Some unscrupulous consolidation companies make it appear they are eliminating your debt, or hide the APR. It's better to transfer you credit card balances to your lowest APR card. Pay more to cards with high APR, send more than the minimum payment, or it will take 10 years to pay it off. If you have cash in the bank earning 2%, it's losing you more to income taxes, so be smart and use it to pay off 18% debt. A home equity loan can pay off credit cards, and write off the interest on your taxes. But you MUST close those cards, or risk running them back up.

Responsible Use Of Credit Cards
Use the card to buy gas or food, and pay it off in full and on time each month to build solid credit, before applying for auto loans. You can't get blood from a stone and the moral of the story is to not get into these situations to begin with. How do people get into these situations? By not taking their financial pulse and making a budget. You must have a spending budget and stick to it. People with bad credit think they have no power to negotiate. That's just how some salesman want you to think. Dealers often charge them full MSRP. These folks, low on self esteem, are often prey to psychological conditioning by salesmen. If you can't afford a new car, research used car loans and think about getting a used car.

"You're a credit risk. Only way to make this auto loan worth it for us is to charge 18%. It's not our fault you have bad credit."
If the dealer learns of your credit woes, they'll say: "This is a great opportunity for you to re-establish your credit rating, since our bank is willing to give you the money." They just want you at 18% APR auto loan. Re-establish your credit on a lower priced sofa or computer.

Auto Financing for First Time Car Buyers And College Students with bad credit

Some dealers have first time buyer/college graduate auto financing programs subsidized by carmakers. Sometimes there is no recent grad new car finance program, they just charge you 18% APR for new car loans. If you have good credit history, there's no reason to pay 18% in a bad credit auto loan, they are feeding off your ignorance and rejection fears. You have the same haggling rights I do, don't let any salesman tell you otherwise. Don't fall for first time buyer "0 down" auto financing ads. You must put 20% down on new car loans, or you'll be upside down on your auto loan. Salespeople tell you auto loans are a way for you to establish credit, but it does not mean you have to pay a high APR on your auto loan. You might try used car auto loans too, since you will be borrowing less money. Use car loan payment calculators to get used to the numbers. If you work at your college, try an auto loan through the credit union, a good place to establish credit. Don't let your parents buy the car cash, or finance under their name, it wont establish credit for you. Pay down your debts and clean up your credit score before applying for a car loan. The key to stability is living where you can afford the rent, even if it's not up to your standards, so you don't have to move. If you move around you become un-creditworthy, and might only be able to get a used car loan or a bad credit car loan.

Don't Forget Auto Insurance
You'll be surprised how much some new cars cost to insure. Get your auto insurance quotes before you buy a car, and plan your budget to include insurance. If you're buying a car on the hairy edge of what you can afford, insurance payments will drag you under. Insurance payments are part of your monthly cost of ownership. Read All About Auto Insurance for buying tips, coverage glossary, how to avoid scams, reviews of free auto insurance sites. Auto insurance sites Comparison Market, GEICO and Progressive Auto Insurance give you free online auto insurance quotes, so be sure to get pricing from them too.

Go On to Chapter 2: Discount Car Buying & Car Pricing On The Internet

Jump to any chapter. I suggest you read each chapter in order.
Chapter 1 Get your credit report, how to get a car loan, scams, online car loans, first time car loans, budget & loan excel spreadsheets, credit repair.	Chapter 2 Reviews of internet discount car buying sites, new car prices, find dealer's invoice cost. Get a new car quote.	Chapter 3 What to bring to a dealership, what to say, how to act, what not to do, what to look for at the dealership, and a glossary of all dealer fees.	Chapter 4 How to read dealer invoices, finding dealer's cost, how much to offer the dealer, buyers offer spreadsheet, examples, trade-ins.
Chapter 5 Negotiating tips, dealer scams & tricks to watch out for, dealing with aggressive salespeople, choosing between rebates or low APR loans.	Chapter 6 Close the deal, avoid needless extras, scams in the business office, extended warranty scams, options, buying warranties online.	Chapter 7 Actual misleading dealer ads, and what to do when you've been ripped off, customer satisfaction surveys, how I bought my Lexus.

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