Questions To Ask Before Applying For a Car Loan

Here are a few car loan questions you should ask before you ever apply for a loan...

Can a zero interest auto loan increase the cost of a new car? Yes, if your car dealer is the middleman for another finance company. The reason is that the points the dealers lose on low or no interest loans they WILL make up for by raising the price of your car to MSRP and or adding all kinds of lame fee's, etc. If your zero interest auto loan is offered by the car manufacturer then it won't cost you any extra points. Obviously that rule ONLY applies to zero interest car loans. Anything else and you're fair game.

Of course that doesn't mean the sales person won't try and squeeze you for more money somewhere else during the deal!

Why should I apply online for a new car loan? Its the best way to avoid all the high pressure tricks that happen in the finance department of a car dealer. Its also how you can avoid the new car loan markup scam. If you have good credit, its fast, easy and painless to apply online for a new car loan.

What is the auto loan markup scam? It has been estimated that this car scam costs consumers as much as one billion dollars a year!

The car dealer will often add points to your auto loan based on what they say is in your credit rating. Those points are then kicked back to the car dealer from the lender.

This is an industry wide practice that can easily add $1000.00 or more to the cost of your vehicle and cost many thousands more over the life of your loan. Click here to read more about the auto loan markup scam.

How easy is it to get a zero interest auto loan? You must have a credit score of at least 680 to get a zero interest auto loan.

Negatives on your credit report that you weren't aware of will cost you more money because you will only be able to qualify for a higher interest auto loan.

The other thing is that car dealers will frequently lie to you about whats on your credit rating. So take your credit report and FICO score with you!

A car dealers loan department is NOT the place to get carried away and start making hasty emotional decisions, and believe me - that is what they are counting on!

If you go in there unprepared you will end up so confused and burned out that you will gladly sign away anything to just get the deal done with - and they are counting on you eventually being in this condition! Its all part of the process.