Georgia Car Loans: Know your options!
With the average new car topping $25,000 and the average used vehicle approaching $10,000, the vast majority of Georgia car buyers need help with financing. So, whether it is an Atlanta auto loan in particular or Georgia car loans in general, know your options:
Indirect or Dealer financing. About half of Georgia car buyers go straight to the dealer to arrange their financing. In this arrangement, a buyer and a dealership enter into a contract where the buyer agrees to pay the amount financed, plus an agreed-upon finance charge, over the loan term. The dealership may retain the contract, but usually sells it to an assignee (such as a bank, finance company or credit union), which services the account and collects the payments. The benefits of Indirect financing include:
- Convenience. 1-stop gets you the car and its financing. You pick the car. The dealer’s finance office shops your credit around to find you a lender. Note: the Dealer may add participation points for putting the deal together. Always ask to see the rate at which you were approved.
- Multiple financing relationships. The dealership’s relationships with a variety of banks and finance companies mean that it can usually offer buyers a range of financing options. Auto loan Atlanta or auto loan Savannah many dealers in the SmartCarCredit network have over 10 financing partners.
- Special programs. Dealerships and manufacturers periodically offer low-rate financing promotions. Qualified buyers may find they save significantly by timing their purchase with these programs which often run towards the end of the model year.
Direct or Bank / Credit Union financing. “Direct lending” is when a buyer obtains financing directly from a finance company, bank or credit union. The buyer / borrower agrees to pay the amount financed, plus an agreed-upon finance charge, over the loan term. Once a buyer and a vehicle dealership enter into a contract to purchase a vehicle, the buyer uses the loan proceeds from the direct lender to pay the dealership for the vehicle. Consumers also may arrange for a vehicle loan over the Internet. The benefits of direct financing include:
- Know your rate. The consumer knows in advance of entering a dealership exactly how much they are qualified to borrow and at what rates.
- Centralize. The consumer can centralize their all their banking relationships in one place taking advantage of discounts, common reporting, and, in some cases, faster approvals.
- Focus. The consumer reduces the number of negotiations he must conduct at the dealership. No longer concerned about financing, the consumer can focus on the price of the car of the trade in.
Dealer vs. Private party. The prior Georgia car loan discussion focused on cars purchased through dealerships. But, over 15 million cars are bought and sold between private parties each year. What if you want that Atlanta car loan for a private party purchase? Don’t be surprised if the loan rates you receive from your bank are higher for these types of transactions. A recent survey of banks found that private party interest rates were a full percentage point higher than dealer rates (8.3% vs 7.3% on average). Why? Many lenders base their interest rates, at lease in part, on the value of the underlying collateral (the used car). Therefore, without a licensed dealer with whom the lender may have a multi-year relationship vouching for the car, the lender may require an inspection of the car. This adds costs to your Atlanta auto loan which are "baked into" the finance cost.
Need help running the numbers on your Georgia car loan?
Car loan Atlanta, Savanah or Macon: You'll want to try our Georgia Car Loan Calculator
Know your Georgia car loan payment amount: Try our Georgia Car Loan Payment Calculator
Know your Georgia car loan rate: Try our Geordia Car Loan Rate Estimator
A word about Georgia Lemon Laws. Auto loan Atlanta or auto loan Georgia a lemon is a lemon. Your vehicle may be considered a lemon if a qualified technician has made three unsuccessful repair attempts or the vehicle has been out of service for 30 calendar days the within shorter of 24,000 miles or 24 months. Further, either one of the repairs or 15 of the “out of service” days must fall within the shorter of 1 year or 12,000 miles. Your vehicle may also be considered a Lemon if there has been one unsuccessful repair attempt of a serious safety defect in the braking or steering systems within shorter of 1 year or 12,000 miles.
If your vehicle falls into one of the categories above, send a letter by certified mail with return receipt requested to the manufacturer. The manufacturer then has 7 days to notify you of where to take the vehicle for repair. That repair facility has a further 14 calendar days to correct the problem. If the manufacturer fails to correct the problem, take advantage of the state-run arbitration mechanism provided by Georgia. As with any legal proceeding, contact an attorney as filing a lemon law claim may compromise other important rights you may have.
Disclosure: We developed the content for SmartCarCredit™ while working with automotive industry clients. We hope you find it helpful in making informed decisions. While we believe the information to be accurate, we do not guarantee its accuracy.
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