Cars are a luxurious necessity in today’s time, and if you are looking to buy one soon, you need to do your research, explore various options, and have enough money. Most people in America take loans from a bank or look for financing options at car dealerships. However, if this is your first time, you may overlook certain details and be fleeced. To help you, here are six car financing mistakes you should avoid.

• Not checking credit score

Before you apply for a car loan, ensure that you know your credit score and not just your credit card debt, as this will help you know if you qualify for a car loan. Remember, the higher your credit score, the better are your chances of getting a favorable loan deal. Moreover, it also gives you a chance to negotiate a car financing deal as per your conditions. Your credit card report consists of your credit history, credit score, amount of debt, and your debt behavior.

• Focusing too much on the interest

Interest, of course, is an essential factor to consider, but focusing solely on it is a common car financing mistake. A loan offering lower interest rate may have a long repayment tenure, burning a big hole in your pocket. Any loan with a repayment tenure stretching for more than five years should not be considered.

• Choosing a car first

Most people choose a car model first and then think about finances. You should be well-informed about your budget and other financing options before you drive down to your nearest car dealership. It’s best to do your research before the salesperson tries to coax you into buying a car that is beyond your budget.

• Not paying down payment

If you are able to put down a good amount of down payment when buying a car on loan, you will surely get a good loan deal. If you don’t pay a down payment, your monthly interest payment will likely be higher, and your repayment tenure may also be longer. Therefore, it is necessary that you try to save a good amount of money before buying a car.

• Not negotiating

The offer made by the car dealership may look appealing, but it may not be the best deal in the market. It’s okay to say no to a deal and negotiate certain terms and conditions. You are not obliged to say yes or sign anything without understanding its long term consequences. Read the fine print and not get carried away unless you are confident it is right for you.

• Not doing your research

Do not just go to the closest car dealership in your vicinity. Instead, do some online research and look for the best option. Furthermore, check with your bank and get to know its auto loan structure. Heading straight to the shop and picking the first finance deal is erroneous.