January 2009 marked the worst month for auto sales in more than 25 years, and now, auto manufacturers and the U.S. government are doing their best to entice consumers to purchase cars in an effort to help the ailing industry. Many manufactures are offering zero percent interest rate loans, while the Senate recently passed a measure that would allow tax write-offs for auto-loan interest and sales taxes.
While times are tight, consumers should review their credit and financial standing, as they may be in a position to take advantage of good deals on car purchases. In fact, experts like automotive analysts at Edmunds.com say now may actually be the best time to buy a car.
Lucy Duni, vice president for consumer education at TrueCredit.com by TransUnion, is offering the following simple tips to guide consumers on the path to making a car purchase:
Rev-up your report knowledge. Review your three credit reports on an ongoing basis to ensure they accurately reflect your credit history. Your history will dictate your credit score, and your score affects your loan rates. Always know where you stand by signing up for the TrueCredit Messenger, a free application that is downloaded to your desktop and lets you know when there’s been a critical change to your report.
Make necessary tune-ups. Whether or not you’re in the market for a new car now, keep a close eye on your credit reports. If you spot something that doesn’t look right, get in touch with the creditor involved or the appropriate credit reporting company. If you have significant issues with your reports, consider delaying your purchase until those issues are resolved to help you get the best rate available.
Make an age-defying purchase. Buying a used car can save you a heap of money if you do your research. On the other hand, many of the current factory incentives are for new cars, so it’s important to shop around to find the best deal for you.
Luxury versus economy: calculate how much you can afford. Before you decide that a car is right for you, it’s a good idea to evaluate your current debts and income to see how much you can really afford. Also determine if you have a trade-in or down payment to help you pay for the car. Such assets can help you negotiate a better rate with lenders and can be especially important if you have problem credit.
Navigate your options. When you’re ready to talk to lenders, it’s a good idea to shop around for the best available interest rate. Visit your local bank or credit union to discuss applying for an auto loan. Financing with the car dealer can sometimes be more expensive, so pricing out your options is a good idea.
To download TrueCredit Messenger and for tips about managing your credit, log onto www.gotruecredit.com. TrueCredit.com is the consumer arm of Chicago-based TransUnion Interactive, a subsidiary of TransUnion, a global leader in credit and information management. The site helps consumers understand personal credit management, empowering them to achieve greater financial well-being through the use of credit reports, credit and insurance scores, credit monitoring, debt management tools and identity theft insurance services.