Watch Out For These Car Finance Offers
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Looking for a new car? Luckily for you, it’s a buyer’s market out there. Thanks to bankrupt automakers looking to get rid of extra inventory as soon as possible, now has never been a better time to go shopping for that dream car, especially if you’ll be using car credit to purchase it.
However, like with most shopping, it’s important to look out for these “too good to be true” deals, which often might not be the best option for you, especially if you’re looking to finance your purchase. Here are the deals you’re likely to see, and why you should avoid them at all costs:
Buy One, Get One Free. So what’s the deal with this deal? By purchasing one vehicle, dealers will throw in another for free. It might be a great option for those larger families who could use the second car; however, be careful before you sign the contract. You won’t get a choice in the second car, and dealers are likely to force a large SUV onto you, which is one of the most unpopular cars on the market. Additionally, that second car isn’t exactly free: dealers will tack on hidden fees to ensure that they’re getting something for their troubles. If you’re buying that first vehicle with car credit, you’ll be stuck with a loan at a higher interest rate to cover the hidden costs of your “free” second car.
Low-Interest Car Credit. Dealers are now looking to entice buyers into their dealerships with the promise of low-interest rate loans. Sounds like a great deal, right? Don’t get excited just yet: often, you’ll need a stellar credit history in order to take advantage of these great car credit deals. Besides, these attractive loans are often only available with certain models. If you have another car on your mind that’s not covered by this deal, then you’re out of luck. To get the best financing deal, get competitive offers from your bank or credit union before you approach the dealer. This way, you’ll be sure to get car credit at a competitive interest rate.
Drive Off The Lot. Many dealers are promising potential customers that they’ll be approved for car credit on the spot, meaning they can drive off of the lot that day. Yet if you peruse through the fine print, you’ll see that the terms of the loan can change – and you might see your interest rates go up only a few weeks later.
Don’t fall for this trick; instead, be sure to get a competitive loan offer from another bank or lender before you approach the dealer for financing. Another important note: never let the dealer know that you intend to drive the car off of the lot that day. You want to have the power in negotiations – and this will only put your dealer in a superior negotiating position!
