How To Buy A Car The Right Way

Interest rates are lower than ever and it just might be perfect time to upgrade your ride. Before you go to the dealership there’s some important things to know. If you don’t already have financing arranged the dealer may offer to find you a lender. They then submit your information to multiple lenders in order to find you a good interest rate and suitable loan terms. This is called a hard inquiry and it can have a negative effect on your credit score. Your best bet might be to get preapproved from your current bank, but to insure you get the absolute lowest interest rate you have to have a great credit. PowerHouse Consultants can help you reach your highest credit potential. Contact us today.

Hard Inquiries

An inquiry on your credit score is considered a hard inquiry when you’re applying for things like a car loan or a credit card. Just one inquiry can lower your credit score by 2-8 points! If you’re making multiple inquiries while car shopping that could mean lowering your credit score by up to 50 points. That could possibly bump you down a tier, change your interest rate and cost you a significant amount of money. This is different from a soft inquiry. A soft inquiry may be made by  your employer to see if you are in good standing or an insurance company that needs to determine how much to quote you. These do not effect your credit score.

Preapproval

Before risking lowering your credit rating at the dealership it’s best to see if you can get preapproved for a car loan at your preferred bank. This can be very helpful by providing you with a reasonable budget, favorable loan terms, a low rate, and a calculation of your payments, leaving you with nothing to worry about at the dealership except what car is right for you. This also saves you the hassle of sweating the details at the negotiating table all while saving you those precious credit points.

Credit Report Printout

Although the preapproval method is what we recommend we’ll also mention another option which is to print out your own credit report and submit it to the dealer when you arrive. You can get a free credit report from the three major agencies (Experian, Equifax, TransUnion). If you’re not getting the interest rates you were hoping for give us a call and we’ll help you achieve your highest score and save you big bucks at the dealer on your dream car.