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Knowledge Base

How to finance your first car




Check your credit. Go to your bank and line up your own financing. You can also check Capital One Auto Finance or AutoCreditFinders. Applying for new car financing without knowing your credit score is a mistake.

When you know your figures, visit the car dealer. Not before.

Ask about the dealer's financing and compare. An advertised low 0% APR might sound good, but might just be a trick to get you negotiating. If the APR is related to what you buy, you will be better off without the dealer's financing. If the dealer start negotiating the price of the car based on monthly payments or is telling you that your actual credit score is lower than your figure, it is probably a good idea to look elsewhere.

But if you still decide to go with what the dealer offers you, don't drive off with the car until the loan is approved. Just because you signed the papers, it doesn't mean that everything is OK. You will probably find the fine print "subject to loan approval" somewhere in your contract. Meaning the car dealer will get away with promising you a low APR, even if he knows it won't stick. One or two weeks later you will get a call, and all of sudden your financing will look completely different.

If you have a bad credit, you probably don't want to finance your car at the dealer.

 

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