Tips to Get an Auto Loan in a Bad Economy

If you turn on the news or pick up a newspaper, you’re bound to find at least one or two stories about the economy and how terrible it’s doing. From causes of the financial stress to future predictions about where we’re going to end up, everyone has something to say about the economy these days. If you’re in the market for a new car, your big concern is how a bad economy is going to affect your attempt to get a car loan.

While things like your personal credit rating still play a big role in whether or not you get a good auto loan (or even get one at all), the current state of the economy also has a big effect on your chances of getting a car loan. In a bad economy, banks and other financial institutions tend to lend less and less money. As a result, it’s harder for car companies and dealerships to get loans approved. There is a light at the end of the tunnel, though. There are things you can do to help make sure you get a car loan during our tight financial times.

Auto Loan Credit Score

car lot Tips to Get an Auto Loan in a Bad EconomyIf you don’t know what it is already, you should know what your credit score is before you go to get a car loan. If you didn’t know: the higher your score, the better. The better your credit rating, the easier it is to get a low interest loan. In tough financial times it’s sometimes harder for people to hang onto a great (or even good) credit rating score. If you know what yours is before you go to get your auto loan, you’re going to be able to have a better idea of what your choices are.

Have a Big Down Payment

This advice also applies to getting an auto loan in a good economy, but it’s even more important during tough financial times. If you’re willing and able to put down a large portion of the price of the car upfront, the dealership and the banks will know that you’re serious about the agreement and will be less likely to default on payments (since you already have so much money tied up in it.) If you can wait a few weeks and save up more for a down payment on the vehicle, you’re going to have a lot easier time getting an auto loan, even in today’s rough economy.

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