When you look for car loan at your local dealership, you might be limiting yourself. Although working with financing professional such as those employed in dealership finance and insurance offices as advantages, dealerships tend to work only with the select spectrum of lending institutions with whom they have previously established a working relationship. If your credit is sub optimal then you want to shop your application to the maximum range of lenders, thereby optimizing your chances of getting approved at a rate you can afford. Why limit your options?
Disadvantages of Dealer Financing for Military Personnel
The other disadvantage of dealer financing is that many auto finance managers are adept and experienced at gleaning extra profits from unwitting car buyers. There are many tactics which they might employ, such as padding your interest rate such that you pay more in financing fees over the long haul than you otherwise should, or tacking on unnecessary additional options that substantially increase the purchase price of your new car, truck or SUV. There are other even less ethical unfortunately less common predatory lending practices. Military servicemen and women have been found to be a key prey for these tactics. A Department of Defense study found that nearly 70% of junior military members who had taken out military auto loans in the past year had been the victim to some form of unethical lender or dealer tactics.
Protecting Yourself from Predatory Lending Tactics
Do not let yourself be a victim. Whenever you’re involved in military car sales, keep your wits about you, seek experienced and professional financial guidance, and most importantly not over extend yourself. Do not agree to pay more than you can afford per month. Remember that maintenance, fuel, insurance, and registration fees and taxes all must be factored in to how much vehicle ultimately costs. These may seem like small details but they add up to a lot.