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If I was approved for a different loan after signing an initial contract at the dealership, do I have to sign it?
I recently purchased a car, and the dealership told me that I would be paying $658 a month for 85 months and my interest would lower as the loan matures. However, they called me two days later to tell me the bank approved something different, and I would have to sign a new contract where my monthly payments would be higher but I would pay over a shorter time frame. Do I have to sign this contract, or would it be more convenient to stick to what they first told me?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Car loans
can undoubtedly be confusing, and knowing what’s best for your situation can be challenging, but in general, it’s good to have a shorter loan term if you can afford it. By having a longer loan term, you are:
- Going to pay more in interest, especially if the interest rate is subject to change
- More likely to default on the loan because you’ll still be making monthly payments when the vehicle is older and requires more visits to the mechanic
However, you need to understand your options before making a decision and should contact the dealership to find out if you’re required to sign this new loan agreement. Additionally, if you aren’t locked into a loan agreement, you should shop around and compare offers from multiple lenders to find a repayment plan that better meets your needs.
If you do find yourself locked into a car loan that you’re not happy with or can’t afford, you should consider refinancing or discussing options with your lender. Additionally, saving money on other expenses, like your
car insurance
, can help ensure you never miss a payment. If you want to save money on car insurance, the
Jerry
app is a good place to start. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy, and if you ever have any questions, agents are just a text away! View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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