Your credit score may help you avoid a common dealer scam

The process of buying a car is one that few people enjoy. Some may like the “sport” of dealing with a salesman, but for the most part, the notion of buying a car is as popular with the public as a visit to the dentist. The whole buying process is a mystery to many people and unlike buying a coffee pot at Wal-Mart, you often don’t even know how much the car costs. That, combined with other issues, such as how to finance, often leaves customers in a fog. 

Here are a few tips that can help you with the process of buying a car as affordably as possible:

Check your credit report - We often tout the importance of being familiar with your credit report and this is one of those times when your credit report is vital. Of course, as with any loan, you will get the best auto financing if your credit score is near the top of the 850 point FICO scale. A score below 600 would suggest that you will pay a lot for your car loan, no matter where you get it. Check your credit report about six months before you plan to buy a car. Check it for errors. If there are any errors, fix them. If you have delinquent payments, pay them. Get your score in top shape so that you will be in the best position to qualify for an auto loan.

Know your credit score - Do you know your credit score? Most people do not. That’s not a good thing when you are shopping for a car, because most dealers will assume that you do not know your score. And if you don’t know your score, how can you know if you qualify for the best interest rate? You don’t. A frequent scheme used by dealers to maximize their profits is to tell buyers that they didn’t qualify for the best interest rate. Most customers just nod and say, “OK.” If you know that your score is 750 and the dealer says, “Sorry, but your score is only 590” you can either correct them or elect to finance elsewhere. Either way, you will benefit from knowing where you stand.

Arrange financing - You can certainly finance at the dealer; many people do. But you might do better to check with a bank or credit union. You might even check with one of a variety of online lenders who can arrange auto financing over the Internet. You might try Eloan or Capital One; they both have auto financing programs online. Don’t forget to check with the dealer for promotional interest rates. Sometimes the rates offered by dealers are so good that you cannot find a better deal elsewhere. Know your options.

And of course, know the price of the car. Edmunds.com, Consumer Reports and other companies make auto pricing information available to the public for a nominal fee. Heading to the dealer armed with accurate pricing information is the best way to make sure that you get a good deal when it comes time to buy.

Copyright © 2005-2007 by Retro Marketing. All rights reserved.