3 Automotive Financing Questions I get asked a lot

 If you're like most people you don't purchase vehicles more than once every few years. Let's talk about some of the most common financing questions I get asked as an automotive sales consultant.

Note: I am a Sales consultant for an automotive dealership in Wisconsin your state may have different laws or practices, I can only speak to my own experience.

1. What's the rate?
This is almost a guaranteed question if someone is financing any portion of their vehicle purchase. Why is the rate so important? Well, the interest rate determines how much you will pay on top of the principal amount you borrow; the lower the rate the less you pay in interest over the term of your loan. Bank's and lenders typically publish their advertised rates online, usually, these have special terms or requirements such as; Top tier Credit (meaning you only qualify with excellent or better credit score), Short term such as 36 months or less, or any other criteria the lender has specified. Be sure to always read the fine print. So why can't the dealership tell you your exact rate before we apply for a loan? Our system puts our offer in the lending system for multiple different lenders to look at, they tell us what they are willing to give for rate/term based on the vehicle of choice credit score and various factors. So the short answer is we don't know until we submit.

2. Do I have to put money down?
It depends... Everyone hates to hear that answer but let me try to explain. In most cases, you are not required to put any money down in order to purchase a vehicle. While it does help you in a number of ways it is not required; It can help you qualify for better rates in some cases, it will lower the total amount of your loan meaning you will ultimately pay less interest and gain positive equity faster, and it can be the difference between being approved or denied for a loan. The only time you have to put money down is when the lenders require it; poor credit, too much loan to value, or other uncommon circumstances. So in short if you have good credit and don't have tons of negative equity in your trade then you are most likely not required to put money down.

3. Can I pay extra?
This will depend on your specific lender, the ones my dealership works with are all simple interest loans, meaning you can pay them as fast as you like with no early or pre-payment penalties. There are lenders out there that charge extra if you pay your loan off too fast; that is why it's important to ask questions and read the fine print.

Have more questions? Why not send me a message you can find my business page on Facebook @ "Justin Reto Sales Consultant" I would be happy to answer any questions you have about vehicles and purchasing.
I hope you enjoyed this article if you did please subscribe leave a comment and join the community!