WEBVTT

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When you're buying a car , it can seem

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like the decisions never end . New or

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pre-owned , make , model , color , what

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options to get ? The decisions go on

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and on . But perhaps one of the biggest

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decisions you'll have to make is where

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to get a loan to help pay for your new

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set of wheels . Here are 5 steps to

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make this decision a little easier .

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Step number 1 . Understand the basics

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of vehicle financing . When you finance

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a car , it's important to know that

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you're not the only one with an

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interest in it . The financial

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institution or dealership that loaned

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you the money to buy that car also has

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an interest , and they are considered a

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lien holder . In most states , the lien

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holder will keep the vehicle's title

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until you pay the loan in full . And if

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you default or fail to pay the loan ,

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the lien holder can repossess it .

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Another basic concept to understand

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about vehicle financing is that simply

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stated , borrowing money costs you

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money . Your lender will typically

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charge you an annual percentage rate or

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APR which includes interest and fees .

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The lower the APR , the less total

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interest you'll pay . And generally

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speaking , interest rates are better

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for new cars , people with good credit ,

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and those who borrow for a shorter

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period of time . Step number 2 , shop

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around for financing before you walk

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into the dealership . Compare auto loan

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interest rates at banks , credit unions ,

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and dealerships to hunt down the best

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deal . Having a good credit score will

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help you get a better interest rate ,

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so make sure to clean up any errors on

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your credit report first . Visit

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annualcreditreport.com to get a free

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copy of your credit report and dispute

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any errors . Step number 3 . Get

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pre-approved by the lender of your

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choice . You can often use this

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pre-approval to help negotiate a better

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interest rate at the dealership . The

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auto dealer may offer lower interest

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financing or cashback options . Just be

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sure to weigh your options carefully

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and not jumping too fast . Step number

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4 , know your numbers . Go into the

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dealership knowing your down payment ,

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how much car you can afford , and how

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much you can afford to borrow . Know

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your numbers and stick to them . And

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step number 5 , read all the fine print

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carefully . Wherever you choose to

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finance your vehicle , just be on the

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lookout for any prepayment penalties ,

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which can cost you . And if there's

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anything you don't understand in the

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fine print , remember that your

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installation legal assistance teams are

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there to help . So there you have it ,

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the fundamentals of vehicle financing .

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Follow these 5 steps to be better

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prepared and more confident in

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financing your next car or truck and

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enjoy your new ride . To learn more

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about auto loan financing , speak with

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a personal financial manager on your

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installation .