Whilst searching for a new car, you might feel excited and energised by all the lovely new vehicles calling for your consideration — but when you start to talk car financing, you may come swiftly crashing back to earth. The simple truth is that nobody really loves dealing with the financing aspect of car buying (well except maybe the car dealers!) However, you can make the process much smoother and easier if you take a few small steps to prepare the right way. Here's what you should do to secure the car financing that you need.
Know What Your Credit Report Says
When you're applying for vehicle financing, the first thing your car dealer will do is get a credit report. This report will essentially reduce your credit-worthiness to a number: your credit score. It's important that you know your score ahead of the day you try to secure financing, and fortunately you can do this easily online in minutes. Use a website like Finder, Credit Simple, or Credit Savvy to find out your score. You'll also be able to view the things that contributed to that score.
If there are any surprises on your credit report, it's best to address these straight away — before you try to secure car financing. Credit reports in Australia contain contact information for creditors, so take advantage of this and speak with any creditors who have questionable or incorrect information to get bad marks cleared up. Eliminating just one or two credit issues can raise your score dramatically — and this means much easier financing.
Have Your Proof of Income
Before you're able to finance a car, you'll need to prove income. This is usually easiest through pay slips. Bring at least the last 3-4 pay slips along when you try to finance your vehicle. If you receive your pay slips electronically, print out copies for easy reference. Whilst other income can be used to help determine financing, you aren't required to disclose income like child support if you don't want to. Having the proof of income on hand can speed along the financing process considerably.
Research the Car's Value
Car dealerships inflate prices so they can make a profit on sales — but you can control the amount of profit they actually make. Do some research on the cars you're interested in. Sites like Redbook are known for giving car valuations online for free, instantly. Whilst you expect to pay a bit more than what the dealer paid, you undoubtedly want to keep their profit minimal — and save yourself money. Only begin financing talks after you negotiate a fair price for the vehicle. When you know the exact price you'd be paying, you can look at the financing offer and determine how much it will cost you over the course of the loan. This means that you can negotiate a better deal on the finance rates if needed.