Auto Loan Don’ts

Don’t Shop Too Much For Your Auto Loan

Every time you apply for an auto loan, it affects your FICO/credit score, usually in a negative way. It’s important to shop around for the best deal, but too much shopping could hurt you in the long run.  Keep your auto loan applications down to three or less to minimize the effect on your credit score. Do all your applications in the same week, so it counts as one credit inquiry, not several.

Don’t be Afraid to Walk Away

Don’t be afraid to walk out of the dealership. Keep in mind that dealers would rather make a small profit than none at all. The dealer knows you’ve got plenty of options and might be willing to throw a great deal your way just to get you back in the door. Wait a few days and maybe you’ll get a call with the price you were looking for. If not, go to another dealer.

Don’t Add Extras if You Were Approved For a High Interest Rate

If you only qualify for a high interest rate, like 15% and higher, don’t add items like extended warranties, VIN number window etching and paint protection. There’s no reason to pay 15% for those add-ons when you can get them from a private company if you absolutely want them and not pay the high interest for them.

Don’t Pay the Dealer’s Ad Costs

Refuse to pay advertising costs when you buy a new car. Many dealers will try to include the cost of their advertisements in the price of your car. Make sure you see a list of everything you’re being charged for so you’re not stuck paying for extras that have nothing to do with your car.