Buying a car is exciting. So many decisions to make, and so many dealerships or car lots to visit pump you up. Then you see “the” car. You slowly draw in a deep breath and walk into the office to buy it. Do you have all the papers you need? Let’s examine that.
1. Banking Facts
Any lender will need to know that you can repay your car loan. They’ll need to know if you have loans you’re paying on, how far down they’re paid, and that any income is enough to cover the loan. The lender will also need to know how many sources of income you have, and how much they pay. Lenders look for a low income to debt ratio regarding loans.
Tip: Bring checking and savings account statements as well as loan documents and repayment schedules.
2. Credit Score
Some lenders use the three credit bureaus to get credit scores, while other lenders use FICO. Some lenders use both, to get a well-rounded picture of your credit. You can get your credit and FICO scores from a number of websites like Credit Sesame, Wallet Hub, and FICO. They’re free to use, and you can keep track of your credit score as you repay your loans on time.
Most lenders look for a credit score of between 700 and 850. This means you have excellent credit. You’ll get the lowest interest rates and more favorable repayment terms with a higher score. However, having a score of 660 is enough to get a car. You’ll just be paying a little more in interest and payments.
Tip: Print out all of them, so the car lot or dealership can get a well-rounded picture of your credit. The higher the credit, the lower the interest payments on your loan.
3. Loan Pre-Approval
Buyers who don’t have cash with which to buy a car or a credit card on which to put the transaction will need a loan. The first two categories will get you through loan pre-approval. Now, you have an idea how much a payment will cost as well as what rate of interest you’ll get. Most car loans are for 72 months, but some experts recommend limiting your loan terms to 60 months. They also recommend a ten percent downpayment while using gap insurance to cover you, since you’re paying a little more on your loan.
4. Proof Of Car Insurance
If you’re trading in a car, then you’ll already have car insurance. Buyers without a car will need to have an idea of the type of car they want, so they can compare insurance prices and coverage. Once you’ve done that, you can choose a car. While you’re in the office doing paperwork, you can call the insurance carrier of your choice.
They’ll need to know the VIN or vehicle identification number. They’ll need to know the make, model, year, mileage, and trim of the car. The type of car you choose determines your insurance premiums, so do your comparisons carefully. Add the premiums into your car payments, so that you’ll have a good idea of how to budget your car each month.
Having everything you need at your fingertips is the difference between a long, drawn-out experience and a quick and easy one. Now, get out there and get your car!