Car financing once meant back-and-forth trips between bank and car dealer. It was uncomfortably reminiscent of “go ask your mother, go ask your father.” Mercifully, lenders and sellers work together a lot better now. That’s helpful, since the two are often in different cities or even states. For buyers, financing options are easier as well.
Online. Car shopping online saves countless hours of row-by-row searching on dealer lots, and car financing online is at least as helpful. It allows you to cast a wider net for hooking the right lender. There’s a lot to be said for keeping the business local with your regular financial institution, and in the end they might have the best deal anyway. But not even investigating other possibilities means you potentially leave hundreds on the table over the life of your loan.
By phone. Some folks have limited trust of the confounded Interweb. They might browse, but they stop short of providing the kind of personal information needed for car financing online. To each his or her own. He or she can still find an easy process in getting a loan by phone. Lenders often extend their telephone service hours beyond their walk-in times to accommodate these services, and many can return decisions the same day you call. It may be lower tech, but in the end it doesn’t necessarily demand much more time.
Pre-approval. However you initiate the car financing process, getting pre-approval puts you more in control when you shop. If you’ve gone through the home-buying process, you probably remember the difference it made once the agent knew about your mortgage pre-approval. The same applies here. It sends a clear message to the dealer or private party that you’re not on a tire-kicking spree, you’re prepared to buy. It also benefits your budgeting, because you have a set limit and already know your monthly payment based on that amount.
Dealership. Financing your car directly at the dealership is certainly one of the easiest options; who doesn’t enjoy one-stop shopping? Downsides of this have been longer wait times in the showroom, pressure for tacked-on extras like warranties and higher interest rates than you can get on your own. That’s changing. As consumers have caught on, dealers have caught on. They are responding to better-prepared buyers with more enticing offers of their own, so don’t rule out this option entirely.