Tips For First Time Car Buyers to Get Online Auto Loans

What Are First Time Buyer Auto Loan Programs?

Whether you are buying your first new or used car or are planning to apply for online auto loans for the first time, understanding how automobile dealerships and lenders see you, and what you can do to improve that image, can help you to be prepared in advance of applying for online auto loans for the first time, so that you will be in a better position to get approved for an car loan with a lower interest rate and better terms. After all, you want your monthly auto loan payment to be the lowest it can possibly be, right?

Who might apply for first time buyer car loans? Some people that first time auto loan programs can help could be:

* Teenagers, personally buying their first car in their own name will need to apply for first time buyer auto loans as they have no credit history behind them

* College students living away from home for the first time frequently have not had time to build a credit history before leaving for school and so will often need to apply for first time buyer car loan programs

* People that have always paid cash for a vehicles in the past, but now want to upgrade to a newer one or are forced to take out automobile loan because they do not have the cash funds to buy a vehicle at present

* Immigrants that have moved here from other countries, and thus have left their credit histories behind, may need to apply for first time auto loan programs in order to start building a credit history

Not All First Time Auto Loan Borrowers are in the Same Boat

The first thing to realize is that not all first time borrowers are in the same boat. There can be a lot of differing factors that can either work in your favor, or against you when you are applying for online auto financing. For instance:

* Are you employed full or part time? If you are not employed, do you have an income? Not being employed is not necessarily a game stopper, but if you plan to have your name on the title of the car and on the auto finance, you will need to demonstrate that you have either a job, regular income, or other funds that you will be paying your monthly auto loan payment from. Of course, the higher that your income is, the easier it will be to qualify for lower interest rate first time buyer auto loan programs.

* Do you have no credit history, because you are just starting out your financial life, or do you have a bad credit history/low credit score because you have had a few credit slip-ups in the past? Dealerships will certainly work with you in either case. However, if you have a low credit score, depending on how bad your credit history is, the dealership may be inclined to offer you a higher rate of interest and a lower credit limit on first time buyer auto loans as opposed to someone that has not made any credit mistakes in their financial life yet.

Note, see our recent article entitled “How to Get Approved for an Auto Loan with Bad Credit if you have Low Income” to learn how to get unwanted items removed from your credit report to bring up your credit score.

* Will you have any funds available to make a down payment on your auto loan? Whether you are applying for first time buyer auto loans, or if you have had auto loans in the past and just need another one now, what every auto dealership or lender is going to take into consideration when assessing your application and the items on this list is; how much of a risk are they taking in making an auto loan to you and what if anything can they get you to do to mitigate that risk. Making a down payment is one thing that you can do to mitigate the dealership’s risk, making them more likely to quickly approve your automobile loan and to give you a more reasonable interest rate. In addition, a down payment will obviously bring down what you owe on the vehicle and so your monthly payments will be lower and more affordable. Down payments are usually not required to get online auto loans, but they can be very helpful when negotiating with a dealership. Even a small down payment can make a difference in how the dealership sees you.

* Is there someone that you know that would be willing to cosign for you on your auto loan? Cosigners are not required in order to get online auto loans, even if you have bad credit or no credit history at all. However, the use of a cosigner can save you a lot of money and make the application process go much more quickly and smoothly. A cosigner is someone that puts their name on your loan application along with yours, guaranteeing that the loan will be repaid. The limit and maximum amount of your automotive loan will be determined by the cosigner’s income and credit standing, not yours. So, if you choose to have a cosigner, make sure to pick one that has a high credit score. With a cosigner, there is really no need to look for first time buyer auto loans because you will be treated by the dealership as though the higher credit score and income were yours.

* What is the ratio of your monthly housing payment as compared to your income? A little known fact is that auto dealerships and lenders pay attention to this number. For instance, if you make $1,000 per month income, and your monthly housing cost is $300, then your housing cost takes 30% of your income. Anything over 40% will send up a red flag to the dealership/lender and they may need convincing that you can make your monthly payments on time. Take this into consideration when you complete your auto finance application.

Taking the above items into consideration, you should be able to get a clearer picture of how automotive dealerships and automotive loan lenders see you, and what you can do to control that image, at least to some extent. Once you have submitted your application, the die has been cast and you will see what the dealership offers you at that point.

3 Things All Dealerships Should Know About Car Buyers

Our previous articles have been largely aimed at buyers, but we would also like to share some insight with all the dealers out there as well. Here are three things all car dealers should know about car buyers:

The media make a good living out of demonizing you.

During any given week, we (buyers) are sure to find several articles on Yahoo! news, CNN, or one of the other news sites that tells us how car dealers try to screw us over. And when we are actually in the car market, we are flooded with "how-to" articles detailing how to avoid your tricks.

The media isn't just making these stories up, though. After all, according to the Better Business Bureau new car dealerships were the 4th most complaint ridden industry in 2009 while used car dealerships ranked 7th. But even still, it seems that whenever it is a slow day on the news desk pumping out another article describing dealers' awfulness is an easy way to produce some content.

Buyers' expectations when they walk into a dealership are that they will get pushed around by a salesman, they will endure time-consuming and uncomfortable negotiations, and that they will overpay for the car that they actually want. And that is just what buyers expect. Buyers are generally not surprised when the vehicle they came to see is no longer on the lot or that the advertised price was an amazing sales deal that just ended yesterday. This tends to cause a lot of unwanted stress and anxiety on the buyer's part. In the car business, dealers call this "burn-out." Nothing is worse for a dealer than a burned out buyer because that buyer will always feel as if they've been taken for a ride.

Although this seems bad for dealerships, I'm not so certain that it is. Because dealers have the ability to change many of the negative perceptions of the buying process, this is an easy way for any dealership to enhance its competitive advantage. Imagine a courteous dealership that genuinely tried to figure out its customers' needs and recommended appropriate models and features. Imagine a dealership that understands that buyers have so many other matters in life and that the car-buying process needs to be quick. Imagine a dealership that trades unpleasant negotiations for transparency. That is the dealership buyers want to patronize.

We Want To Find Our "Go-To" Mechanic

Unless we have an established relationship with the mechanic around the corner, most of us think that we get ripped off every time we bring the car into his shop. The waiting area (if there is one) is small and uncomfortable, the coffee's been brewing since last Christmas, and the mechanic always finds a way to "save me big time" by repairing something before it actually breaks. After walking out of there feeling like a fool one too many times, I'm looking for an alternative.

This reality presents dealerships with a fantastic opportunity. We're hungry to service our vehicles at a place we trust. If we had a great car-buying experience, we're happy to take our vehicles back to the same dealership for regular service for the life of the car – even if it does cost a little extra for an inspection and an oil change.

We offer dealerships this loyalty because they have earned our trust in previous transactions. Instead of selling me a car, you walked me through my options and empowered me to make the best decision based on my needs. Instead of just telling me you "saved me big time" when you replaced the alternator belt, you showed me the belt so that I could see why you needed to fix it. These are small, seemingly trivial actions but they are necessary to gain my trust.

The learning point here is that dealerships must have a holistic approach to customer engagement. The salesman on the floor must understand that the way he treats me directly impacts how much I trust the entire dealership, which directly impacts my desire to service my vehicle at that dealership and my inclination to return to that dealership when I'm searching for my next vehicle.

"You don't earn loyalty in a day. You earn loyalty day-by-day."
JEFFREY GITOMER

In 2010 Chrome reported that brand loyalty continues to slide, with only 35% of buyers responding that they want to purchase a car from the same brand they previously owned (down 4% from 2009). Dealer loyalty is also on the decline with only 24% of respondents claiming that they chose a dealer based on a prior purchase, or someone they knew purchased, from that dealer.

There are a multitude of factors contributing to these falling numbers. The internet, for one, has made it much easier for buyers to weigh the pros and cons of different car brands. The internet also makes it much easier to see the competing offers different dealers are making, reducing the opportunity cost of physically visiting multiple dealers just to get an initial offer.

The internet has also degraded buyers' relationships with dealers to a certain extent. 15 years ago car salesmen served the dual role or educator and salesperson simply because information about different vehicles was not as easily accessible as it is today. The internet is somewhat marginalizing car salesmen by obviating their role as educator. Without that role, buyers understand their relationship with salesmen, and dealerships, as largely transactional – buyers want a car and dealers want to close the deal – without clear mutual understanding. Transactional relationships are the most superficial form of human interaction. Engaging in a transactional relationship implies that the relationship is severed as soon as the two parties are finished extracting value from each other.

Therefore one obvious way to improve loyalty is for dealerships to cultivate relationships with buyers that aren't purely transactional. Instead of dealers thinking about how they can extract the most value from a customer, dealers should be thinking about how they can create the most mutual value from their relationships with buyers.

How does a dealer do this? A good starting point is being honest and fair with every customer. It's really that simple.

4 Important Reasons Why One Should Go For Junk Car Buyers Online

Your car had a good run and even served you well during its life expectancy, but now it is now time to buy a new vehicle and sell this old one – is that the case?

The problem that arises is whether to sell this car to junk buyers or put it online on websites that sell & buys old articles. Setting up your vehicle for online listing can be a tiresome activity as you have to deal with dozens of buyers and have to entangle your brain in some negotiations to grab the best deal.

That is not the case with junk car buyers, they don’t eat your brain even, you call them, they pick your car and you get paid out with a good amount that too on the same day – sounds interesting right?

Following are the few benefits that will explain why one should go for junk car buyers online:

1. You get paid out instant

Posting car online for selling takes a lot of time and even more time to get the money in exchange. It takes at least quite a week to look for buyers and set a great deal. If your backyard wants to be emptied in urgent, better call the junk car buyers, as they tow your car for free & even pays the amount on the same day of the towing.

2. Great price no matter what condition the vehicle is in

The best part is you don’t have to worry about the condition of your vehicle and spend in its repair before disposing of it for final as these buyers take the car in any shape & condition. Even if your car is without engine or spare parts, with dents or certain damages, they will still tow it.

3. Don’t you feel your time is important

Putting the cars for online selling & then waiting for the consumers to turn out with good deals never happens in a day. You not only have to wait for the buyers but also have to make sure the following checklist is all met with the buyer’s need:

– Have to clean the vehicle inside out.

– Have to take a clear & detailed picture of the vehicle to post.

– Putting a compelling description below the listing.

– Making communication with prospective buyers regarding the selling process.

– Scheduling the meetups & inspection for the buyers.

– Selling the cars with the good or desired deal.

But that is not the case with junk car buyers as they don’t expect you to meet these check-list points, they take away the car in any condition – on the same day you booked the appointment.

4. No need to beware of scammers

The task of selling cars on such websites is dubious for many as it is risky to plan a meetup and prevent oneself from frauds or scammers. But these junk car sites are quite reliable as they enter a contract first and even get you your money on the same day – the risk becomes less.

Try these buyers when you are in a hurry, want your backyard to be cleaned in an instant, want to buy the brand new car and most important want the money in the bank account to the earliest.

How to Sell Your Car Part 2: How to Find Buyers

Today, the preparations are over and you are ready to locate some buyers.

Notice that I said you are ready to “locate buyers” instead of “advertise your car.” This is an important and intentional distinction. There is a big difference between putting a for sale sign in the window and being proactive about selling your vehicle.

“For Sale” signs won’t sell your car. You have to sell your car. To do that, you have to locate a buyer.

The first step in locating buyers is to make yourself easy to find.

Put your car everywhere. eBay, Craigslist, Cars.com, AutoTrader, Twitter, Facebook, your blog, your church bulletin board, your bulletin board at work, the bulletin board at the gym, and on and on.

Many of the listing sights, such as Cars.com, will allow you to print up a really attractive flyer for your listing. It should be in color, have pictures, and have all necessary information including the price you decided on in my previous article on preparing sell your car.

Make sure all of your listings are consistent and put as many pictures up as the site will permit. Make sure you take lots of clear pictures and be prepared to e-mail more as necessary.

The next step in locating buyers is talking to people.

I was shocked that after only a couple of months with a Facebook account, I had over 200 “friends.” Do I really know 200 people? I guess so. You probably do to. Make it your goal that every one of those people will know that you have a car for sale. Every. One.

Even though you put flyers everywhere, remember that flyers aren’t responsible for selling your car either. Putting up flyers isn’t the end goal, selling the car is. So be proactive.

Send out an e-mail blast to your friends with a few moderately sized photos. Talk to everyone at work. Talk to everyone at the gym. Talk to everyone at the church. Don’t be shy.

Ask them, “Did you see my flyer on the bulletin board? I’m selling my 2002 Wrangler, if you know anyone.” That’s it! How much time did that take? Two seconds? No pressure. No sales tactics. And it will be worth while when you hear, “You know, my cousin is looking for one of those. I’ll take him a flyer.”

The final step in locating buyers is following up.

If someone e-mails you, e-mail them back. If someone calls you, call them back. If someone is taking a flyer to their cousin, ask how that went and see if you can get their e-mail to send some more photos.

You don’t have to be obnoxious or annoying, but you also don’t have to wait for someone to beg you for your car before you actually try to sell it.

If you follow these three steps, you shouldn’t have any trouble locating buyers for your well priced, clean, and inspected vehicle.

Next step, what to do once you have a buyer.