Car Loans: Getting Your 1st Auto Loan [Auto Loans]
November 19, 2007, 05:47:15

The excitement of applying for auto financing can be almost unbearable as you wait on all of the details to be worked out, but if you are a smart shopper you have done your homework ahead of time so that you can increase your chances of being approved and making a smart investment. If you are only walking blindly into the dealership hoping you will be approved simply because you are cute, it is a Friday and you have been on your job for a week then you are probably going to walk away sorely disappointed.

Shopping for a good vehicle loan is entirely possible and it is still possible if you are looking at getting your first auto loan. For most companies there are some requirements in terms of how long you must be on your job in order to qualify for the best financing rates. It is always a wise idea to find out this information and shop around to see who can potentially give you the best deal and if you are even likely to be approved based on your time on your job.

Additionally, the lender is going to want to know about your income. Can you really afford a vehicle? How much can you realistically afford? Most lenders have a specific formula to determine how much you can afford to pay based upon your debts and income, which is called debt to income ratio. You want your percentage of debt to be as low as possible compared to your income. This will increase the amount that you can afford to spend on a vehicle. A smart shopper would ask for a loan on a vehicle that they can afford, a shopper who is merely dreaming would ask for a loan on a Chevrolet Corvette on a Hyundai Sonata budget.

If you are certain that there are certain features you cannot live without, find a dealership who can give you the best price possible on a model that has what you are looking for. Never start actually filling out financial paperwork though until you find the vehicle that you really want. Let them know you are shopping around and you are likely to be offered a much better deal. Making good deals can help you get a better vehicle for less money and ultimately make an even better investment.

In addition to being concerned about how long you have been on your job, how much debt you have, and how much money you make the lender is going to want to know about where you live, as well as look at your credit file. Make sure you gather all of your financial information together before car shopping so that you can move quickly when you find a vehicle that you like. Making responsible decisions about credit can start with your first car loan and with some time spent doing research and planning ahead you can make a wise investment, get a great price for the vehicle and get some really good terms on the financing as well.

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