Get tips and learn techniques for financing your vehicle.
How Auto Loans Work
Know the steps to getting the right auto loan.
Let’s walk through the steps briefly.
1. Decide how much you want to borrow.
Be realistic about what you can afford. Factor in:
- The price of the car you want
- How much you plan to pay as a down payment
- The trade-in value of your current vehicle, if you plan to trade it in or sell it
Some banks, including BBVA Compass, offer a car buying service for its customers. The service allows you to get a competitive quote on your car up front. That way, you know how much you need to borrow before you go to the show room.
2. Decide the length of the loan.
Terms generally range from 12 to 72 months. You can pay off your car faster with a low interest rate or more gradually with lower monthly payments. Consider how taking a Manufacturers Rebate, for example, instead of 0% financing can save money in the long run.
3. Shop around.
Many people finance their cars through a dealership, but, sometimes, you can get a better deal through a bank. It pays to compare rates before you agree to any auto loan. Some banks, including BBVA Compass offer discounts if you have a checking account with them and you auto pay your loan from the checking account.
4. Be armed with your credit score.
The better your credit score is, the better interest rate you can get. A good credit score leaves you more room to negotiate the terms of your loan.
As you make progress in your search for the right auto loan, consider these tips:
- You likely will want a fixed interest rate so that your payment amount and interest will never change.
- If you want the flexibility to pay off your auto loan sooner than your contract ends, find a loan with no pre-payment penalties. Otherwise, you might be charged fees for paying your loan early.
- Some banks, including BBVA Compass, offer safety features in their auto loans. If you’re suddenly facing a job loss or disability, these features can protect you and your family.
Be smart and carefully consider your options before you apply for any auto loan. If you’ve done your homework, you’ll navigate the process smoothly.