An auto loan is more than the sticker price on a vehicle. When you're financing a car there are plenty of other costs to know about, especially if you're looking to get the lowest out-the-door price that you can.
An auto loan is more than the sticker price on a vehicle. When you're financing a car there are plenty of other costs to know about, especially if you're looking to get the lowest out-the-door price that you can.
The price you're going to pay for a vehicle after all its associated taxes and fees is known as the out-the-door price of a car. This is different from the manufacturer's suggested retail price, or MSRP, that you see on a vehicle's window sticker. And we're still only talking about the cost of the car itself.
If you're looking for the real cost you're going to pay, you also need to account for the interest that most borrowers encounter when they take out vehicle financing. It typically isn't free to borrow money with a car loan unless you qualify for 0% financing, which is rare, especially when you have credit challenges.
The amount you have to repay on your auto loan depends on the interest rate you're assigned when you're given a loan. The better your credit score is, the lower the rate you're likely to see because your credit score is one of the biggest factors in determining your interest rate.
Typically, you should see all the things that go into your auto loan and car buying price when you get your buyer's order from the dealer. This lists all the costs associated with your purchase. Be sure to read this carefully and know what you can negotiate on an auto loan before you sign your buyer's order. Once it's signed, you're agreeing to pay for everything listed.
To get the lowest price you can for your next auto loan you need to know what's negotiable. You don't always have to pay every cost listed as-is on your buyer's order, and you don't have to agree to everything the dealership tries to sell you.
These items can typically be negotiated before you accept the price you're looking at:
ACE Tip: When you ask for something to be removed or changed in your negotiations, ask the dealer to initial it, and request a completely amended clean copy of the buyer's order before you sign it (hang on to the original for comparison).
Some parts of the car loan process aren't able to be negotiated with your lender, or the finance manager at a dealership. These things have to be paid, no matter what:
Now that you know what to expect going into your auto loan, make sure that you're wise with your vehicle choice as well. If you're dealing with poor credit, focusing on getting a reliable used car or certified pre-owned vehicle can be a good way to save money and get a good deal on a car loan.
Whichever route you choose, be sure to get a vehicle that meets your needs and fits within your budget. And don't forget to factor in the costs of vehicle ownership such as insurance, fuel, and maintenance.
Also, if you're considering a bad credit car loan, make sure that you're prepared to prove your ability to take on an auto loan. Subprime lenders can work with tough credit situations, but they require documentation to prove that you have the ability, stability, and willingness to take on a car loan. You can learn more about bad credit auto loan qualifications here.
If you're ready to dive into another auto but don't know where to turn due to credit challenges, we want to help. Here at Auto Credit Express, we've gathered a nationwide network of special finance dealerships that are signed up with bad credit auto lenders. To get matched to one near you, simply fill out our fast, free car loan request form, and we'll help take the hassle out of finding a dealership.
Senior Automotive Financing Editor
Meghan has been writing professionally for over 25 years. She is expertly versed in automotive special financing and pricing analysis, having published hundreds of articles on Auto Credit Express and its sister sites, CarsDirect, and The Car Connection. Read more
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