Auto Loans

Understanding your auto financing options including manufacture, auto dealer, credit union and bank loans.

Obtaining auto loans for both new and used car purchases is usually a relatively painless process. Car dealers want to sell cars, so they make various financing options available to buyers with credit histories of all types. The most important thing is to review the details of auto loans offered as thoroughly as possible to make sure the repayment terms are exactly what they have been represented to be. Here are a few of the most common types of auto loans available:

Manufacturer Financing

For those with excellent credit, the very best auto loan deals for new or certified used automobiles are the loans made available directly through the manufacturer. The terms on these auto loans are often quite attractive - usually 5% APR or even significantly less. That said, to receive these excellent deals, the purchase of an expensive late model vehicle is often a precondition.

Dealer Financing

Many times, car dealerships will offer their own auto loans, either themselves or through a partnership with one of their lending affiliates. Dealer financing can be hit or miss - for those with very good credit, the rates can be quite competitive; however, those with damaged credit will likely pay remarkably high finance charges. When considering dealer financing offers, it is important to review the terms with scrutiny as dealerships normally receive additional compensation from the financial institution based upon the rate of interest and finance terms you are sold.

Bank And Credit Union Auto Loans

Securing an auto loan from your own bank or a community credit union is generally a good alternative, especially when purchasing a used automobile. Most local bank branches are pleased to be able to offer service to their customers - they are usually fair when it comes to the amounts they will loan and also with their interest rates. While the rates can sometimes be just a little bit higher than other types of auto loans, the fact that you are dealing with a trustworthy, professional lending partner is usually worth the minor extra cost.

Having Difficulties Paying Your Auto Loan?

Learn about auto loans and their impact If so, it is important to remember two things. First, the lender can and eventually will repossess the car if you stop making payments. This might seem like an easy way out, but please understand that the lender also has the right to sell the vehicle. You will then be liable for the difference between what the vehicle sold for and what was owed in the final payoff balance. The second thing you should keep in mind is that it is costly for the lender to go through the repossession process and these additional fees, plus interest, are added into the amount you owe.

If you are having trouble making payments on your auto loan due to short term financial difficulties, lenders are able to offer loan modifications, interest rate reductions, and 30 or 60 day payment extensions. Consider negotiating a plan with the lender as they will usually be receptive if they can avoid a repossession. If you have tried these options without success, consider the GFM debt management program. Give us a call today at 1.866.467.1259 to learn more!