Detroit Car Loans

Detroit residents often face some common problems when financing their new vehicles with Michigan car loans. Here are the top eight pitfalls as well as solutions on how to avoid them.

1. Not knowing your credit rating. You should always have an idea of where you stand with your credit before you apply for Michigan car loans. Your credit score will largely determine your interest rate.
• SOLUTION: Order your free copy of your credit report and review it for any errors or other items that could negatively impact your interest rate.
2. Overspending at the dealership.
• SOLUTION: Set a price range for your new vehicle and stick to it. The payments on Detroit car loans should not exceed 20% of your net monthly income.
3. Not researching interest rates. The majority of Detroit car buyers venture into a dealership without having looked into current market interest rates. This information is critical in determining if you are getting a good deal on Michigan car loans.
• SOLUTION: Go online to find national averages for auto loan interest rates.
4. Heading to the dealer without pre-approved financing. Detroit car buyers usually go to the dealer without any approved financing because they are not familiar with the various Michigan car loans available or they believe they will get a lower rate at the dealer. This will rob you of the leverage you need to negotiate the lowest possible interest rate on your Detroit car loans.
• SOLUTION: Get a loan beforehand that comes with no obligation. You can get Michigan car loans on our site that will allow you to get pre-approved for financing without having to commit to any particular lender.
5. Choosing 0% financing over other options. Detroit car dealers will usually present car buyers with two options: reduced financing rates or a cash rebate. Some consumers mistakenly go for the 0% financing option, thinking it will save them the most money.
• SOLUTION: You’re almost always better off opting for the cash rebate, applying it toward the purchase price of the vehicle, and then securing Detroit car loans from a third- party source.
6. Allowing the salesman to mix the vehicle price with the interest rate or monthly payments. Car salesmen love to haggle over monthly payments instead of the vehicle price because they can manipulate your loan to give you a deceptively low monthly payment that is still a horrible deal for you.
• SOLUTION: Keep interest rates, monthly payments, and vehicle prices separate in negotiations. Ideally, you want to walk in with Michigan car loans so you can focus solely on the vehicle’s price.
7. Not reading the contract.
• SOLUTION: Read your contract carefully to make sure that you’re not paying for services or items you don’t need.
8. Not walking away.
• SOLUTION: The dealership staff will try to pressure you into making the deal ASAP. If you’re not comfortable doing so, walk away.

See our Grand Rapids car loans page for specific information regarding Grand Rapids.