As the credit market is in complete chaos all new car buyers are beginning to stress about being approved for a loan. A new car means less repairs compared to buying a used car and gives a ton of unpriceable warranties and maintenance. Since a new car has a new engine - you are getting better gas mileage and cleaner emissions.



All new buyers have to keep an eye out for the complex rule of auto loans. Dealerships are now offering 0% interest during most of their sales which attracts a ton of customers. What you may not realize is how hard it is to get accepted for this deal. Banks on the other hand offer loans but they are at an extremely high interest.

With the addition of the F.A.I.O.S or "Fice Auto Industry Option Score" even a person with a perfect credit score can have difficulty getting a good loan. This credit report -only- focuses on credit history based upon previous car dealings; payments and past loans. This means even with a good credit score from the major bureaus such as Equifax and Transunion, it still is a hard task to get the 0% interest loan from the dealer.

One good tip of advice is to research your credit report and credit score before going to the dealership. The new car sales team expects the buyer to be overly excited about the new car, that the small details in loan stipulations might be overlooked. Dealerships will promote their banks of choice (which helps them to finance their showroom lot) and often try to increase the interest rate on the loan by lying about your credit score. The best preparation is to have your financing organized a month in advance before you arrive at the dealership for a sale.

The smartest way to get the best auto loan deal is to buy a copy of your credit report and credit score. Even though you are eligible to receive a copy of your credit report free annually, it's especially important to know your credit score, which often times you might have to pay a small fee for. Once you know your credit level, and make sure there are no unknown "dents" (accidentally unpaid disputes), you can search online for a credit union or bank that often specializes in auto loans.

It is recommended to get a loan that is higher than what you actually plan to pay for the car. Assuming you get approved often times they write you a blank check that can be filled up to the amount of the car which gives you the freedom to barter with the salesman over the price of the car as you have a check and you know there are no hidden fees.

If you decide to trade in a car that is still on a loan make sure you get a written statement saying that the dealer will pay off the loan. Include the amount of time they have to pay it off, whatever that may be. Without this documentation you are at risk if the dealership does not pay for the loan - as it is still in your name. Having this clearly stated in the contract keeps you safe from whatever penalties the bank gives for failure to pay the loan.

"Gap insurance" is a vital addition to any new car buyer's loan collection. Even with a fantastic rate on your insurance through a big-name insurance company such as Geico; gap insurance covers the car even when the loan is more than the value of the car. Once a car passes 300 miles it is a used car and the value will drop accordingly, so having gap insurance gives whatever the bank will not pay (if it is stolen, etc.) so it does not have to come out of your pocket. No matter what sort of loan or insurance you get, adding in the gap insurance to the price of your total loan is a great idea to save you a good deal of money in the long run.