Forewarned is Forearmed: Obtaining a Used Auto Loan before You Set Foot on the Lot (cont.)
Contributed by Alix Mcmurray
There is nothing wrong with this product if the terms are superior to other deals you've been offered. However, the dealership will cast the least favorable light possible on your other options in hopes of persuading you to buy their financial product. Remember too, that the very loan contract you sign with the dealer (which is actually a Retail Installment Sales Contract, or RISC) can and will probably be sold to a bank or other lender.
This results in an unstable interest rate for you and a nice little mark-up for them.
Your Used Auto Loan's Secret Weapon: The Bank Draft
Investigating and establishing your loan options online spares you the potential embarrassment of being declined at the dealer. It also prevents the tarnishing of your credit report by an inquiry resulting in denial. You can use Carfax online to search for your prospective used car's accident and repair history. You can calculate online your hypothetical monthly payments for the amount and term of the used auto loan desired.
And the best weapon of all, you can have in your hand a bank draft with your name and address printed on it. All you have to do is sign out the amount at the dealer, and relax in the knowledge that the terms and conditions of your loan have already been determined. As the saying goes, sometimes the pen really is mightier than the sword.
