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When you go to an auto dealer, people immediately think that they are going to get scammed. In many cases, they will...especially when loans are involved. Many loans are often scams for dealers to get more money out of you. Many people don't try to get good loans with their bank or loans with other reputable companies. Loans are often hard to obtain. Some people just go to a car dealer and have no idea what they are getting themselves into. Most know they have to get loans somewhere in order to get a car, so they just figure to get their loans at the dealer.
In some cases, loans are an excellent idea to get at the auto dealership. But in other cases, loans are a bad idea. First you need to decide if the dealer is reputable. Then you need to see about your credit score. Loans are often based off of your credit score. Loans can have good rates if your credit is good. Loans will have bad rates if your credit is not so good. Auto dealers often want you to get loans with them because they make a lot more money off of the interest you will be paying into the loans. Some auto dealerships offer loans with low APR rates. These loans usually say 4.9 percent or so. The truth of the matter is that only about 7% of the people that apply for these loans actually get these loans at that rate. If you have bad credit, you are looking at loans with a 30% rate, sometimes worse. Also, many of these loans require you to pay the loans off in 3 years. This also means that the loans will have a high monthly payment. Many people cannot afford this. Most people get loans that are paid off in 5 years. This means the loans have lower monthly payments, but more interest is paid over time into the loans.
The best thing to do is try to have less blemishes on your credit score. Then go to a good, reputable auto dealer. You can check online with the better business bureau and see if they are in good standing. Also try listening to other people that had good experiences with the dealership. Try going when there is a sales promotion. Many dealerships offer huge discounts on older models when newer models are coming in. They also offer free warranties, loaner cars, tune ups, and other things when you buy a car from them. Avoid car dealers that don't offer any of these things. Auto dealers should want your business. They should try to make it seem as hassle free as possible. If they pressure you too much, it is best to leave.
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