Fall is in full swing, and according to AAA, September through December is one of the best times for consumers to shop for a car, as dealerships look to offload vehicles to make way for next year’s models. Car prices remain close to the record highs seen in 2022, so many car shoppers are on the hunt for deals and watching for favorable interest rates.
As a branch sales manager with Arvest Bank, my team often deals with customers looking for new cars, and we have learned a lot to help car buyers better understand their financing options. Car buying can be a smooth ride if you do your homework up front, and there are several things you can do ahead of time to help you get the best deal and find the financing option that fits your needs.
Here are some tips to get the most out of your car-buying experience.
Review your credit report
Lenders use your credit score as an assessment of your creditworthiness and ability to repay a loan. Having a strong credit score increases your chances of getting approved for a loan and having a more favorable interest rate. Be sure you review your credit score before you apply for financing to check for any inaccuracies that could negatively impact your score, and therefore, your ability to get a loan. If your score isn’t where you’d like it to be, and you have time, you can work toward improving it.
Set your budget
When you finance the purchase of a car, you are going to have a monthly car payment to pay that loan back. Knowing your budget and what you can afford to pay each month is crucial as you start the financing process. As important as the monthly payment is, you also want to consider the big picture: the total amount owed over the period of the loan. How long you plan to drive the car will also play a role in deciding what term loan works for your needs.
Consider pre-approval before going to the dealership
Walking into a car dealership can be exciting but also stressful, especially if there is uncertainty about financing. The National Automobile Dealers Association (NADA) reports that more than 80% of new cars and trucks are financed. Dealerships aren’t the only place to get affordable financing, though. Your local bank or credit union can get you pre-approved for a loan that meets your needs.
Pre-approval can give you the peace of mind to walk into a dealership with confidence, knowing exactly what you can afford. It can also help you compare offers and even negotiate your car’s price. In the end, if a dealer can provide you with a better offer, at least you had options when you started the process.
Additional considerations
Remember that the lowest rate doesn’t always mean the best loan option. Consider the lender and the customer service when getting any type of loan, and do your research and consult online reviews before making a decision. If you’re considering add-on products such as GAP coverage or extended warranties, remember to balance the value of these products with your overall budget. These can add up quickly and push your total cost beyond your budget. A local bank partner can also help with refinancing existing auto loans, which could be beneficial if interest rates drop substantially.
Car shopping should be an enjoyable experience — it’s a big purchase and you want to feel confident in your lending partner. If you’re considering a car purchase this fall, we would love to talk with you at Arvest Bank.
Shelby Monnig is a branch sales manager for Arvest Bank – Springfield Region. She can be reached at smonnig@arvest.com.
What to know if you’re looking to finance a vehicle this fall
