5 Things to Watch for When Getting a Military Car Loan
If you’re like many people in the market for a new car, you have concerns about the costs of financing. Too often, consumers haven’t done their homework and believe the deal is done before they’ve sat down to speak with the car dealer’s business manager about getting a military car loan. Don’t let the euphoria that comes with buying a new car cloud your judgment. Watch for the following before you sign any financing paperwork.
Interest Rate
When it comes to car loans, many consumers only look at their monthly payment, rather than how much they’re paying for the car. While you may have a low monthly payment, you need to consider how long you will be making payments. If the loan term is long enough, any payment level can be reached and you’ll end up paying more in interest. You, the buyer, are in the driver’s seat and can negotiate the interest rate. If the dealer won’t lower the rate, then walk away. Make sure the details are accurately spelled out in the contract, that the agreed upon interest rate doesn’t change during the loan’s term, that there is no “subject to financing” or “subject to approval” statements and ask about prepayment penalties before you sign. Also make sure that the contract you are signing is a final contract. In some cases the dealer collects the down payment, tells you how much your monthly payment will be and sends you home in the car. Hours later the dealer calls, explaining that the financing didn’t go through, they need the car back and you to sign a new contract. This is a spot delivery. The dealer’s new contract requires a larger down payment and a higher monthly payment, giving new meaning to the “subject to approval” statement. This is why it’s ideal to shop for a loan at banks or credit unions before you even step foot on the dealer’s lot.
Insurance
Another way dealers try to drive up the costs of financing is through insurance. Many dealers offer life and disability insurance as a means of protecting your investment should something happen to you. While the dealer may imply that this is required, it is not. Also be on the lookout for this insurance on the paperwork, as it is often added without your knowledge. Banks and credit unions offer this type of insurance at a much better rate and sometimes include it for free when you’re financing your car with them.
Extended Warranty
Many car experts believe that the warranties that come with new cars are comprehensive enough that an extended warranty is unnecessary. But dealers almost always offer extended warranties on a new car. If you believe you still need an extended warranty, it pays to do some research. By exploring online sources, banks and credit unions, you can compare and get a better price, sometimes for half of what the dealer charges.
Added Protection
Dealers try to add more to the bottom line by offering rust protection, undercoating, fabric protection and paint protection. Rust protection and undercoating are both applied at the car factory. Don’t pay to have it done again. Using polymer sealant car wax is the best way to protect your car’s paint and no matter who applies it, you or the dealer, it has to be reapplied every six months. You’ll save a lot more money if it’s you. The same is true of fabric protection. Buy a can of fabric protector at your local car parts store and do it yourself.
Car Alarm and Window Etching
Most reputable auto shops will install an alarm system that’s just as good as the dealer’s and often for $500 less. While window etching the Vehicle Identification Number (VIN) on all the car’s windows will deter many car thieves, dealers charge hundreds of dollars when you can do it yourself for between $20 to $30 dollars. But if you still want the dealer to add these features, you can better negotiate a fair price knowing their true costs.
Armed with these facts and the knowledge of how to get the best deal, you’ll be able to get a great military car loan at a good rate. To get started with the loan process, apply here.
