Car Buying Tutorial

Everyone needs reliable transportation, and this often involves trading in your older car for a newer model. Different factors determine whether you're able to buy a car. Lenders take different things into account, and knowing how the buying process works may help you qualify for a loan and buy the car you need.

Instructions

1

Stay with the same employer for a minimum of 6 months. Retain at least 6 months of paycheck stubs to show to auto loan lenders. Being employed for at least 6 consecutive months indicates stability, and you're more likely to get approved for a car loan.

2

Improve your credit score. Get a lower interest rate on the auto loan by establishing a high credit rating. On-time bill payments and low balances on credit cards help reverse bad credit and raise your rating.

3

Decrease the loan balance with a down payment. Plan to save between 10 and 20 percent for a down payment. Down payments help you negotiate a better interest rate, and you'll save money on the monthly payment.

4

Use a co-signer, if necessary. If you have no credit history or a bad credit rating, get approved with the help of a co-signer. To benefit from the co-signer arrangement, the person chosen must have a good credit score.

5

Check around for the best rate. Get auto loan rates from your personal bank, and then compare this rate with the interest rate offered by the dealership's finance department.