Exposing Common Auto Financing Myths

29 March 2016
 Categories: , Blog


Your decision to purchase an automobile was a major choice to make. While cars are extremely common, many first-time buyers can feel a great deal of stress about making this purchase. This should not be surprising given the expenses that can be involved with buying a car. While financing can be essential for allowing many individuals to make this purchase, this aspect of the car buying experience can be poorly understood by first-time buyers. If you are about to start the process of buying a car, it is important to understand the truths about the following two myths.

Myth: You Should Start The Financing Process After You Have Chosen A Car

It may seem to make sense that you would start the process of financing a car after you have chosen one. However, it can be exceedingly difficult to choose a car if you are unsure of how much financing you will be able to get. To avoid choosing a car that you will not be able to finance, you should make sure to meet with your bank to obtain a prequalification for an auto loan. While the final loan amount can be lower or higher than the prequalified amount, it can still provide you with a rough idea of the price range you can consider.

Myth: Financing Services Will Only Consider Your Credit History

There is another common assumption among some people that financing services will only consider a person's credit history when making these decisions. There is no arguing that the contents of your credit report can play a major role in determining your qualifications for financing. However, this is not the only factor that these services will consider. For example, a person's employment history can be a major factor. Individuals with good credit history and a lack of stable employment or earnings may find it difficult to be approved for a large auto loan.

Making the decision to go through the process of investing in the purchase of a car can be an overwhelming experience for many people to go through. In particular, this process can be especially difficult for those that a weaker understanding about financing automobiles. To improve this understanding, it is important for you to understand that you should meet with a financing service prior to starting to shop for a car and that credit history is not the only factor considered by lenders. Be knowledgeable about these aspects of auto financing can help you to ensure that this experience goes as smoothly as possible for you. Contact auto dealers near you for more information.