Is that new sports coupe calling your name? Can you picture yourself driving the coast in that red convertible? Would a new truck make your life easier? Well, before you step into that showroom, you owe it to yourself to do some research. And not just about gas mileage.

By taking a few easy steps before you buy a new car or truck, you’ll help ensure that the road to purchasing your new ride is as smooth as can be.

Before you start car shopping, you should check out a copy of your credit report. The information on your credit report is used to calculate your credit score, which often influences the interest rate you’ll get on your auto loan. People with higher credit scores will likely qualify for lower interest rates because they’re considered a better credit risk.

When you check your report you should look at:

  • Possible Inaccuracies: Sometimes mistakes happen, or credit files of people with similar names are merged. Are all the accounts listed on your report indeed yours? Are the listed payment histories accurate?  If you’ve found possible inaccuracies on your credit file, you should dispute them immediately, as the process can take more than one month.
  • Inquiries: Multiple inquiries can lower your credit rating. If you’ve been applying for a lot of new credit lately, it may be a good idea to wait a couple months before applying for auto loans.
  • Your total credit picture: Lenders often concentrate on the past two or three years of your credit history when considering your credit worthiness. Have you consistently paid your bills on time? Is your debt load reasonable, relative to your monthly income? If not, you may want to consider concentrating on lowering your overall debt for a few months first, as well as building up a positive payment history.

Once you feel comfortable with your credit situation, then it’s time to do some other basic investigations:

  • Research the vehicle you’re considering. Lots of Internet sites feature ratings from current owners and independent companies.
  • Look at various loan sources. Check with your bank or local credit union as well as the automobile dealer to see who can give you the best rate.
  • Create a budget before you go shopping. How much of a monthly car payment can you afford? Keep your budget in hand when you’re shopping so you’re not tempted to buy a Mercedes when you’re on a Kia budget. Otherwise, you may end up with the burden of a car payment that’s too much to handle.
  • Check on insurance rates before you buy. Your insurance rates can go up by hundreds of dollars a year when you buy a new car. You may be able to handle the auto loan payments, but can you swing the premium?
  • Consider both new and used vehicles. Used cars may not boast that same new-car-smell, but they often are a better buy. New cars and trucks depreciate at a much faster rate during the first two or three years, so you can save some dollars by taking home a pre-owned vehicle.

To see your free credit report, visit Experian, the preferred credit report provider for

Source: Credit Matters


© Experian 2008. All rights reserved.


© Experian 2008. All rights reserved

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