Securing an Auto Loan before Buying a Car: No Lemonade from Lemons!

A Credit Article Contributed by Alix Mcmurray

Securing an Auto Loan before Buying a Car: No Lemonade from Lemons!

If you are buying a new or used car through an auto loan, the last thing you probably want to hear is: "If the world gives you lemons, make lemonade! " Now there's no reason to pucker up and take your medicine. You can check out your loan options before even setting foot on the car lot. When you go online to secure an auto loan before purchase, you not only may be able to get a better rate than what the dealership has to offer, but you can do a "lemon check" on that prospective car at the same time!

Red-Blooded American Competition: Compare Auto Loans Online!

If you go online, you have a whole array of auto loan options to choose from: car loans, motorcycle loans, person-to-person loans, refinancing and lease buy-outs. Most of these loan websites have handy built-in calculators, where you can plug in the car model and year, loan amount and terms you are considering, and come up with your projected monthly payment. For new cars, you can also browse for incentives and rebates available from the manufacturer. But don't get carried away! As with any product or service on the Internet, use caution and common sense.

It's Your Auto Loan Party, and You'll Apply When You Want To!

You may encounter websites that have an application form on the very first page, some even asking for your Social Security number. Remember,you are shopping for an auto loan, "window shopping" if you like. There is no need for the merchant to know anything about you. Be as discriminating about your auto loan as you are about your car.

Compare the Annual Percentage Rate (APR) offered by various financial institutions.Compare monthly payments over different loan "lifespans" -- 2-year, 3-year, etc. What you may save on the short-term through a low monthly payment may cost you on the long-term through a much greater loan pay-off amount. Only after obtaining the terms and conditions you are comfortable with, you can then go about applying online, at which point you should be directed to a secure site.

While You Browse for Your Auto Loan, Do a Convenient "Lemon Check"

Many auto loan websites also have a built-in feature by which you can do a "lemon check," that is, look up your prospective car's history to make sure that it is indeed, not a lemon. A defective car or "lemon" is one which is plagued by problems impairing its use, safety or value in spite of reasonable attempts at repair. Every state now has a Lemon Law that applies to car problems encountered in the first year or first 12,000 miles of ownership.

You can look up your car through its Vehicle Identification Number or VIN. This is the unique 17-character number assigned to all cars and light trucks built after 1981. Many websites will give you instructions on where to find the VIN number in your car. Contact your state's Lemon Law administrator -- they can give you the procedures to file a claim. So, happy shopping for that auto loan, and remember to keep lemons out of your shopping cart!