New car buying with good credit and CarSnoop.
The better your credit standing is, the easier it is to get your new car financed. Let’s break down car buying with good credit.
The meaning behind the score.
The plain truth is that your credit score leverages your buying power. Your loan amount and interest rate are directly related to your credit score. According to bankrate.com, 718 was the average credit score for new car loan borrowers in Q4 2018. For used cars, 659 was the average score. If your credit score falls below 600, financing for a new car is possible, but you likely face higher interest rates. The best suggestion would be to improve your score before purchasing that vehicle.
New car buying with good credit is, simply put, much simpler than if your credit score is low.
Shop around for the best financing.
There’s no rule that you must finance your car with a dealership. Although some dealerships offer competitive financing options, it’s smart to shop around online and through your local bank. Online financing options continue to grow in popularity with potential car buyers getting answers almost instantly.
Do you have a relationship with your own bank or lender? They are an excellent resource here as well. With a direct lender, you are guaranteed your rate will not be increased. CarSnoop pro tip: Dealers can raise your interest rate up to three points.
Be careful when shopping around for lenders; too many reviews of your credit could impact your score.
Lease or own?
If you’re looking for a more flexible financing option, leasing might be the way to go. When you lease a car, you basically pay to use the car for a period of time – 36 months is average – paying only a portion of the cost of the car. Leasing monthly payments are typically lower and enable you to drive a new car off the lot with less invasive financing reviews that occur when you attempt to buy a car.
The downsides of leasing versus owning a car do exist. With a lease, you will be bound to a strict rule for set mileage. If you decide to keep the car after your leasing term is complete, you could end of paying more than you would have if you purchased the car from the start. You could also be penalized for exceeding your mileage allowance at lease turn in.
In all, CarSnoop works to navigate you through a new car buying experience that eliminates stress and saves you time, money and energy.