Best Car Loans in Tallahassee, FL

How to get an auto loan in Tallahassee

The average sale price of new cars continues to break records every year. Analysts at Kelly Blue Book reported cars were sold for an average of $37,577 in December 2018. This was 1.3 percent higher than the previous year.

While paying out-of-pocket for a vehicle is difficult for most, car loans make the dream of owning a new or used car a reality. There are various places you can get a car loan in Tallahassee. Some of the most common options include banks, credit unions, dealerships and online lenders. Car buyers also benefit from getting pre-approved for a loan, which gives Tallahassee residents:

• The opportunity to compare multiple loans
• The knowledge of your budget when shopping
• Cash-buyer status when purchasing a car
• Negotiating leverage at the dealership

How to qualify for a car loan in Tallahassee

The primary factor lenders consider when you apply for a car loan is your credit score. Loan applicants with high credit scores are more likely to be approved and receive favorable terms and interest rates. Tallahassee residents with credit scores of 720 or higher get the best rates on auto loans.

Other aspects lenders take into consideration include your annual income, down payment amount and debt-to-income ratio. Most lenders also require there be no active bankruptcies on your credit report.

Comparing car loans in Tallahassee

When comparing car loans in Tallahassee, the most critical factor to look at is the total cost of the loan. The amount you pay over the life of the loan is determined by multiple factors, including:

• Annual percentage rate (APR): The APR of a car loan is the interest added to the principal each year, plus any recurring fees your lender charges. Tallahassee car buyers with good credit receive APRs between 3 and 5 percent, while those with bad credit may receive APRs in the low to high teens.
• Loan term: Vehicle loans are commonly three to six years in length, though some lenders offer loans that are paid off over eight years or more. Longer loan terms result in lower monthly payments but increase the total cost of the loan because of the additional interest you pay.
• Down payment: A substantial down payment reduces the total cost of your loan and lets you make lower payments or shorten the term length. Paying more upfront may also reduce your APR.
• Additional costs: In addition to paying a loan origination and documentation fees on your loan, other charges that may increase your total cost are title and registration fees, a destination charge for your vehicle, sales tax and mandatory car insurance. Make sure the total amount of your loan is high enough to cover all initial costs.

It's good to ask your lender if there are prepayment penalties in case you want to pay your total car loan balance off early.

Getting a car loan with bad credit in Tallahassee

If your credit score is 650 or under, you may have difficulty getting approved for an auto loan. If you can wait to purchase a new car, you can improve your score by paying bills on time and using less than 30 percent of your available credit.

If you don’t have time to work on your credit score first, you may be able to obtain a car loan in Tallahassee by:

• Working with online lenders that specialize in serving people with lower credit scores
• Having a cosigner who agrees to take responsibility for the loan if you default
• Making a more substantial down payment
• Going with a second-chance lender after being turned down for a conventional loan
• Using a credit union for financing

Whether you’re buying a car from a licensed dealer or through a private sale, it’s good to be aware of your rights as a consumer before starting the car loan and buying process.