To help simplify things, we’ve rounded up and debunked some of the most common myths about car finance so that you can make an informed decision on your next vehicle purchase.
Myth 1: You need perfect credit to qualify for a car loan.
False! While having good credit always helps when applying for a car loan, it isn’t the only factor taken into account. Lenders consider other factors such as your income and employment history, so even if your credit is less than perfect, you may still be eligible for a bad credit loan.
Myth 2: Leasing a car is more expensive than buying one.
Not necessarily! Depending on how long you intend to keep the vehicle and other variables, leasing can often work out cheaper than purchasing a car outright. Make sure to do your research and compare the cost of each option before making any decisions.
Myth 3: The longer the term of the loan, the better.
False! While longer terms may seem attractive in terms of lower monthly payments, you should be aware that they also mean paying more interest over time. If you can afford to pay off your car loan quicker, it will save you money in the long run.
Myth 4: You must have a 20% down payment to qualify for a loan.
Not always! Many lenders offer no deposit loans – though if you do put some money down upfront, it could help reduce your interest rates and monthly payments.
Myth 5: You can only get a car loan from a dealership.
Not true! While dealerships do offer financing options, you don’t have to use them – there are plenty of other lenders out there, such as banks and online businesses, who may be better suited to your needs.
Myth 6: The interest rate you’re offered is fixed.
False! Interest rates on car loans can vary depending on the lender and the type of loan you choose – so it pays to shop around for the best deal.
Myth 7: You’ll never get approved if you’ve declared bankruptcy in the past.
Again, not true! While bankruptcy can make it more difficult to find financing, many lenders still offer auto loans to people with a less-than-perfect credit history.
Myth 8: You’ll get the best rates if you buy from a dealership.
Not necessarily! While dealerships do offer competitive financing packages, there are other options out there that might be better for you – so don’t be afraid to shop around and compare different deals before making any decisions.
Now that we’ve busted some of the common myths associated with car finance, it’s time to start shopping around for your next vehicle purchase!
