5 Car Loan Myths Exposed

Perhaps you’ve heard some things about car loans from a good friend or family member. You may have even read a few things about auto loans that just don’t seem true. There are a lot of myths about car loans and this list will set the record straight.

Sticker Price/Full Price
Drivers purchasing an automobile don’t have to get a car loan for the full price of the car. In fact, it behooves many motorists to put down a sizable down payment to lower monthly payments. Also, a driver can get a better car loan rate with a reasonable down payment.

Pre-Owned/Used Cars
Getting a loan for a used car is just as easy as getting an auto loan for a new car. A car does not have to be new to get a loan. Any lender, whether a bank, credit union or in-house dealer financing can determine the true market value of any vehicle, new or used.

Perfect Credit
Many buyers fret at the thought of getting a car loan without having perfect credit. In fact, 60 percent of American consumers don’t have a score of 750 or more, according to Bankrate. You don’t need “perfect” credit to apply or even qualify for a loan. There are many things a driver can do to get a loan and/or a better rate.

Refinancing
Many drivers purchase a car, pay the loan over five years and never think about refinancing to get a lower rate. Interest rates change. Moreover, the less you owe on the car, the better your refinancing terms will be.

Homeownership
Contrary to conventional wisdom, a motorist does not need to own a home or be paying a mortgage to get an auto loan. Though making mortgage payments may help your credit history, you don’t need to own your own place.