INCREASE YOUR CHANCES OF APPROVAL

When the time comes to seek approval for a new car purchase, you'll want to improve your chances as much as possible. Car loans are valuable means of getting your hands on a new vehicle. Now, let's look at the most effective methods for car loan approval.

Maximize Your Credit Score

A solid credit score is key to your ability to get your hands on a car loan. Generally speaking, your credit score is fair at 580 to 669, good at 670 to 739, very good at 740 to 799, and excellent at 800 and higher. Scores lower than 580 are far less likely to grant a would-be driver access to a solid loan, but many dealerships offer loan acceptance with contract terms tailored to any credit level. 

To improve your score, make sure you are on time with bill payment. Being in arrears will drop your score sharply, especially if you've used up most of your credit. The ideal credit usage level for access to loans with excellent terms is around 30%, but the lower the percentage used, the better. It is wise to avoid using amounts of credit that you can pay off within a month. That way, interest fees have no chance to accumulate, and your percentage of credit used stays at or near zero percent. 

Don't feel bad if you can't maintain that extremely low level of credit use. Sometimes life's realities demand that we stretch things a bit. Just make sure that you pay things down as quickly as you can.

Be crafty with credit acquisition. Avoid repeatedly applying for multiple credit sources from a large number of banks or credit card companies. The more you apply, the more your credit score will fall. Only apply for significant increases in credit from one or two sources that you know will grant you additional credit. The larger the pool of credit you have available, the easier it will be to keep your percentage of credit used low. 

Avoid closing credit lines because it will decrease your total credit, making it far harder to maintain a low percentage of credit used. It will also cause a considerable drop in your credit score on its own. Consolidating your debt can help keep your score high. Use a balance transfer-capable credit card to shift your debt onto a single credit source, preferably with a considerably lower interest rate than the old debt lines.

Get Approved Before you Visit a Dealership

You can take care of approval for a car loan before you ever step onto a dealership lot if you wish. The vast majority of larger banks and credit unions offer this service. This kind of approval possibility is generally only available to those with good credit or better. Make sure the type of dealership you are interested in buying a car from is on the approved list held by the loaning organization. Negotiating terms with an authorized dealership will be far more straightforward. 

You can work out a maximum allowed total for your loan if you aren't quite sure what vehicle you want to get, but it is wise to research the vehicle you favor most before trying for a loan. That way, you will ensure that you don't end up with a loan with a longer term or higher rate than average for that particular car, truck, or sport utility vehicle. 

Preapproval has other benefits. It forces you to maintain a responsible budget, makes dealership negotiations shorter and more straightforward, allows you to compare a wider range of interest rates than you'd find at a dealership, and saves you hours of waiting in your dealer's financial office.

Get to Know Your Top Vehicle Choices

It's best to thoroughly research the model years of the vehicles that most interest you. Think about what you want out of a vehicle. List features and capabilities by how badly you need or want them. Test drive your desired vehicles so that you can get a solid feel for how they handle and operate. You don't want to buy a car without knowing what it feels like to be behind the wheel. Also, complete knowledge of and experience with your desired vehicle will make you more confident during negotiations. 

Between those efforts and pre-approval, your dealer will see that you know what you want and have the tools and financial resources needed to keep up your end of the agreement. Before you sign up, find out the available terms of your top choices from pre-approving groups and dealerships alike. You may find that a dealership has a special deal that fits your needs better than the banks or credit unions.

Consider a More Affordable Vehicle

The first thing to come into your mind when you think of getting your hands on your dream car, truck, or SUV will probably be a new model year. They have the most up-to-date and capable features, but they cost many thousands of dollars more than an almost identical used vehicle from just one or two years back. The further back you go, the more affordable your favored vehicle is likely to become unless it is a storied and much-loved classic of some sort. 

Make sure that no matter what kind of vehicle you choose, it won't cost more than around one-fifth of your take-home pay. Include insurance, maintenance, and gas in that calculation. Keep in mind that the older and more used a vehicle is, the more expensive the maintenance and repairs will be. Try to strike an ideal personal balance between cost and desired features to find the best possible car, truck, or SUV deal for you.

No matter what kind of personal vehicle you have your eye on, you are likely to find it and the best-related loan deals at Tameron Buick GMC in Daphne, Alabama. Our experienced and attentive staff will gladly guide you through the entire process of getting approved for and purchasing your ideal vehicle.