Car Loans: Car Equity Loan

Securing financing before you sit down with a dealer puts you in a better negotiating position. Pre-approval turns you into a cash buyer as far as the dealer is concerned. Without pre-approved financing, you'll have to deal with the dealer's finance department, a task I advise you to avoid. If you choose to ignore my advice, be prepared to pay a higher rate, or pay hidden "points" when you finance through the dealer. When you furnish credit information to a car salesman, he then shops your deal (total price, down payment, desired length of loan) to various lenders that the dealership is associated with. If all goes well the lenders will make an offer to the dealership based on your credit rating and specifics of your "deal". The interest rate at which a lender is willing to make a loan is called the "buy rate." Included in the lenders offer will a small ($50 to %100) fee giving them the additional business, which is usually split by the dealership and the salesman.

Home equity loans and lines of credit can be a great alternative to auto loans. The rates are low and the interest paid may be tax deductible, resulting in the lowest after-tax cost. Keep in mind that they should only be used by people with a steady stream of income who can use the interest deduction. Consult your accountant or tax advisor to see if you can benefit from this kind of financing.

Take a look at more car equity loan opportunities on the right hand column of this page and we hope you have learned more about car equity loans and their benefits and pitfalls.

For Your Free Auto Loans Guide, Visit http://www.CarAndAutoLoans.com.

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