Home > Auto Loans > The Risks Of Using The Internet To Find Auto Loans
The Risks Of Using The Internet To Find Auto Loans |
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Anyone browsing through the automotive trade press, general media, or credit union trade publications will be familiar with the connection between the Internet and auto
loans. A lot of the search for good auto loans takes place via the Internet. These commercials would have us believe that the future of the automobile industry is an electronic one: members will log on to a manufacturer's web site; order vehicles online specifying the colors, and features; and then arrange for auto loans from the lowest price lender. But these advertisements don't tell you everything. There are a few things that you should be aware of before you go running off to research auto loans or apply for a loan online. Researching and choosing auto loans on the Internet is not without its dangers. Unless you are dealing some of the few noncommercial sites or dealing with the web site of your bank or your credit union, you are risking a financial rip off. In fact there are more financial rip offs on the web than at a dealership. It is not anything personal. Most of these web sites are computer driven and therefore you are nothing more than an inconsequential module. You can find out for yourself by performing a small experiment online. Go to either a pure finance site or web page of a dealership and/or manufacturer and send an e-mail asking an impossible question, Do you provide auto loans for people who live on Mars or the moon? And you will get an answer that takes you seriously. This will never happen at a dealership. There you will most probably be directed to the nearest mental institution. Also, with dealership finance salespersons, you can look them in the eye and threaten to leave on the spot and finance directly at your bank if they don't give you the deal you want. You can't do that with the Internet companies when you apply for auto loans online. But there are some ways to protect you from being taken for a ride, while searching online for auto loans. There are some finance sites that promise to shop your loan for the best rate or guarantee the lowest rate possible. But none of them can meaningfully guarantee you the cheapest financing and total loan cost. So, don't totally believe them, till you've done further research. There are also some sites that offer you a $100 guarantee that they'll beat any rates. But for that guarantee to be meaningful, you usually must do a lot of work, like applying for auto loans at other sites, and submitting their approvals. Therefore, the guarantee is practically meaningless as well as a waste of time energy and money. Also, direct auto loans from your bank are better than these web comparison sites loans. And, these rate comparison sites only quote rates of auto loans from their cooperating sources. Therefore a site might have a thousand sources, but it might not have the one independent bank in your community that just happens to be having a rate sale this week. These commercial finance Web sites also fail to tell you that a credit union may beat their rates. As far as these web sites are concerned, credit unions don't exist. The reason is that these commercial sites cannot make any money with credit unions. But credit union auto loans have some of the best rates as well as save you thousands of dollars and endless hassle. But there are always some online dealerships that list credit unions as potential sources for auto loans. Though, they may quote a loan rate based on a credit union's lending policies, the dealership will generally try to persuade you from that rate to a more profitable one. So it helps to be on your guard. Another thing that to distrust are testimonials. Anyone, including an employee, can submit a testimonial. And, remember the web is not the only place to find cheap, smart money. So, don't fall for high tech packaging. Your goal should be to examine all the potential sources and then decide on the one that suits your needs the best. However, there are some really great auto loans available on the Internet. And, even if you don't find any good deals, it will at the least provide you with an opportunity to compare rates, before actually deciding your financing source. |
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