7 Common Auto Loan Myths Busted: By Financial Experts
Most people think timing is key to getting the best deal on a new car. But, when you ask them about it, some people will tell you days of the week, while others will add a random month. So what is the correct answer?
Well, sorry to burst your bubbles, but what we discussed before is nothing but a myth. Therefore, you get no concrete answer to this question.
Myths or erroneous assumptions have plagued almost every industry since their inception in the market. And, the auto loan segment is no different at all!
To help you avoid such misconceptions, we’ve busted some common car loan myths throughout this article. Don’t forget to stay with us until the end!
Popular Auto Loan Myths to Avoid
Taking out a loan to buy a car is a long and tedious process. Therefore, there is no need to turn the whole matter into a complicated one. I hope this section can help you in this regard to some extent.
Myth – 1: providing the social security number is essential
Your social security number is pretty essential if you or someone in authority wants to know more about your credit history. Therefore, in some loan cases, you may need to provide the same when submitting your application.
However, after consulting SG Lendela, we have found that the above statement is generally not applicable when you take out a car loan. However, some lenders may ask you to provide your bank statements and latest payslips.
Myth – 2: You can only get a car loan from a dealership
Car dealerships will only offer information regarding your favorite car and offer tempting deals on them.
Nevertheless, if you wish, you can search other lenders to get your preferred loan amount easily. Just make sure you do proper research on them before you do anything!
Myth – 3: Having bad credit makes it impossible to get loans
Well, that’s just plain wrong. There are many lenders that offer car loans even if you have bad credit.
In addition, various used car lots (if you are planning to buy used vehicles) will also offer you the same. There is no need to worry about anything.
Myth – 4: A longer loan term saves you money
You will have to pay a small amount of money monthly if you have opted for a longer loan. However, because you are compensating for an extended period, your overall payment will be much larger than usual.
In addition, car loans generally always follow the rules for simple interest loans. Because the longer you pay, the more your overall interest changes/increases.
Myth – 5: Get a better deal on a rainy day
Believe it or not, this myth was quite popular during a specific period. However, needless to say, the statement is also absolutely false.
A car dealer usually offers deals during various major holidays, such as Christmas Day, January 1, Memorial Day, etc.
Also, the time or date will depend on the dealership and their preferences. Therefore, if you have a favorite person (i.e. car brand), try to keep an eye on their schedule.
Myth – 6: Making a mistake leads to getting stuck with a bad loan
We humans are prone to making mistakes, especially if we are trying something for the first time. Sometimes this can be quite expensive, while other times you can turn things around pretty quickly. And, fortunately, making the wrong choice when choosing an auto loan provider falls into the second category.
If you make a mistake on your first try, we suggest you shop around a bit and refinance your loan at a better interest. This way, you can avoid the problems of interest rate fluctuations and save your money.
Myth – 7: Being rejected once equals no more approval
Usually, each auto loan lender tends to have their own criteria for approving a loan application. Therefore, just because someone turned you down doesn’t mean everyone else will. Also, there are several lenders who can help you with bad credit and get financing to take out a loan.
Completing the entire documentation procedure and getting a car loan can be quite confusing. And, if you’re up to your neck in misconceptions, things will get even more critical for you.
Through this article, we have tried to help you demystify certain myths to reduce your skepticism a little. Hope everything is going well for you now!