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How do you go about getting a car loan?
I want to buy a new car to celebrate my recent promotion at work. The only issue is that I’ve never had a car loan before. How do I go about getting a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congrats on the new promotion! A new vehicle is a great way to celebrate, even if getting a
car loan
seems a bit confusing at first. To go about getting a car loan, check your credit, shop around, and seek car loan preapproval.The first step to getting a car loan is to check your credit report. Knowing your credit score, paying down some debt, and settling any delinquencies can only help your chances of car loan approval skyrocket.
Next, you need to shop around to find the best rate possible. Some great places to start your search include:
- Credit unions
- Banks
- Online lenders
- Dealerships
Keep an eye out for promotional or special financing rates at each of these places, as you might be able to catch a deal. If possible, apply to all of your preferred lenders within a 14-day period and all hard inquiries will count as just a single hard inquiry on your credit report.
If possible, apply for car loan preapproval. With a preapproval, a lender gives you a budget, interest rate, and monthly payments, but it’s non-binding. You can walk away at any minute. But with preapproval, you have an amount to stick to, which you can also use during the negotiations with the dealership.
Next, select the car you want. Then, go back to your lender. Once you get back to your lender, give them the VIN (vehicle identification number) and choose your loan term. **The longer your loan term, the higher your interest rate is, but the lower your monthly payments are and vice-versa.
During this time, shop around for car insurance as well. Just as you would with your car loan, car insurance companies have varying rates. If you fail to shop around, you could leave money on the table. That’s when the Jerry app can come in handy.
As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find an amazing rate for your new car, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
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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