When you go to get a loan for a used car from a dealership that offers in-house financing (such as Auto Max), it is important to know what you are agreeing to before signing for the loan. Many people who are desperate for a car do not take the time to understand what the in-house financing really entails. The following guide walks you through a few things to ask before agreeing to an in-house car loan from a dealership.
Is A Down-Payment Required?
There are many dealerships that do not require you to put down any money to buy the vehicle. If you have any money to put down, you may want to consider putting down something just so that the amount of money you are borrowing can be diminished, which may make it easier for you to be approved for the loan.
What Is the Interest Rate for the Loan?
The interest rate for the loan will be dependent on how much money you make each month, your bills each month, and your credit rating. The lender needs to be certain you can repay the loan without an issue each month. If you have a poor credit score, you can often still get a loan, but you do need to expect to pay a much higher interest rate because you are a risky investment for a lender.
What Is the Late Payment Policy?
You need to know what happens if you pay your loan payment later than it is due. There are many in-house lenders that give you a few days to come up with the money that you owe. There are also some companies that will take steps to repossess the vehicle after a short period of time once a payment is missed.
Do the Vehicles Come with Warranties?
If the dealership is offering you a used vehicle with a limited warranty, you need to know what that warranty entails. Find out what steps you need to take to keep the warranty valid, if your vehicle does come with a warranty before purchasing the car. You need to be able to pay the cost for the car, scheduled maintenance, and insurance costs.
Once all of these questions have been answered, you can make an informed decision about whether or not the in-house car loan is the right option for you. It doesn't hurt to apply for the loan to see if you can get approved for it. You can often find out if you are approved very quickly so you can drive away with your new car that day.