Great credit is great news when buying a new vehicle.
Do you have great credit? Well, the better your credit rating, the easier it is to finance your new vehicle purchase. Great credit is great news when buying a new vehicle.
What is considered a good credit score?
Great question. Your credit score leverages your buying power. Your loan amount and interest rate are directly related to your credit score. According to an Experian report, at the end of September 2019, 715 was the average credit score for a new car loan and 662 for a used car loan. If your credit score falls below 600, financing for a new car is possible, but you likely face higher interest rates. You should improve your score before purchasing a new vehicle if it is low.
Where do I go for financing for a new vehicle?
You are free to choose your lender for your new vehicle loan. In fact, you do not have to finance your car with a dealership. Although some dealerships offer competitive financing options, it’s smart to shop around online and also consider your local bank or credit union.
Do you have a relationship with your own bank or lender? 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. So, buyer beware. Watch the rate!
One important note is to be careful when shopping around for lenders. If you have too many reviews of your credit, that could impact your score.
Is it best to lease or buy a new vehicle?
If you’re looking for a more flexible financing option, leasing may be more favorable. When you lease a car, you basically pay to use the car for a period of time – generally a 36-month term. With that, you\’re paying only a portion of the cost of the car. Monthly lease payments are typically lower and also allow you to drive a new car off the lot with less invasive financing reviews.
That said, 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 drive a lot for work, travel or leisure, you will want to consider the mileage restriction. Also, 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.
Want a car buying concierge to help you walk through the steps?
Consider help with this decision. CarSnoop is a car buying concierge who works to navigate you through a new car buying experience. This eliminates stress and saves you time, money and energy. Want to have an easier buying or leasing experience? Contact CarSnoop.