When Shopping for Auto Loans:
Buyer Beware!

By Ron Sibley
President, Community Guaranty Savings Bank

Spring is finally here and a prime time for shopping for a new or used vehicle,. It’s an enjoyable endeavor but do keep a few fundamentals uppermost in your mind as you shop around. These could save you substantially in the long run and make you a lot happier with your vehicle.

Very often the excitement surrounding the purchase of a new or used vehicle masks a more serious aspect, the auto financing.  Too many individuals pay less attention to the details of the auto loan, letting “0% financing” or “no money down” obscure important financial information.  Since a car is a major purchase that, on average, is financed over three to five years, it involves significant debt.  Not listening carefully could cost you an extra $10-20 a month, which over three years is $360-$720.  Over five years, it’s $600-$1,200.

Always remember that the responsibility of the purchase belongs to the buyer.  So BUYER BEWARE!  Be careful not to be caught up in the excitement of the new vehicle at the expense of doing your homework on the vehicle loan.  The best advice is this.  First find the car you want.  Once you’ve identified the car, ask the dealer for his best cash price versus the special financing option.  You may be better off taking a rebate or a discounted price on the car and financing it with a more traditional car loan.  Compare the dealer’s financing package with other options.  Your local banker will be happy to give you an objective comparison of the various options for financing your vehicle.

Don’t be intimidated; take your time.  If you are confused about something, don’t be afraid to ask questions.  You’ll find most dealers and bankers want to make sure you understand all the details.

Remember, no one can afford to give you something for nothing.  The 0% financing means you may be paying a higher price for the car. It’s always good to have an objective opinion,. That’s a service you can expect from your local banker, one that can help you make the decision that best suits your financial needs.

Keep in mind, car dealers sell cars.  That’s their business.  Banks make loans.  That’s their business.  Do your homework and you’ll feel a lot better about that new car and your new auto loan.