7 Common Car Loans Myths Debunked: By Financial Experts

Most people think that timing is key to getting the best deal on a brand new car. But, when you ask them about it, some individuals will tell you about the weekdays, while others would throw in a random month. So, which answer is the correct one, then? 

Well, sorry to burst your bubbles, but what we’ve discussed before is nothing but a myth. Hence, you are not getting any concrete answer to that question. 

Myths or wrong assumptions have been plaguing almost every industry since their inception in the market. And, the segment of car loans isn’t any different at all! 

To help you stay away from such misconceptions, we’ve busted some prevalent car loaning myths throughout this article. Don’t forget to stay with us till the end! 

Popular Car Loan Myths To Avoid 

Taking a loan to buy a car is a tedious and lengthy procedure. Hence, there’s no need to turn the whole affair into a complicated one. Hopefully, this section can help you out in this regard to some extent. 

Myth – 1: Providing The Social Security Number Is A Must

Your social security number is pretty essential if you or an authoritative figure wants to learn about your credit history. Hence, in some cases of loaning, you may have to provide the same while submitting your application. 

However, after consulting with SG Lendela, we’ve found that the aforementioned statement isn’t usually applicable when you’re taking a car loan. But, some lenders may ask you to provide your bank statements and recent pay stubs.

Myth – 2: You Can Only Receive Car Loan From A Dealership

The car dealers will only offer information regarding your preferred car and provide tempting deals on them. 

Nonetheless, if you want, you can shop around other lenders to get your preferred loan amount at ease. Just make sure to do adequate research on them before taking any step! 

Myth – 3: Having Bad Credit Makes It Impossible To Take Loans

Well, that’s simply untrue. There are many lenders operating out there who provide car financing with bad credit.

Besides, various used car lots (if you are considering buying second-hand vehicles) will also offer the same to you. There’s no need to worry about anything.

Myth – 4: Longer Loan Span Saves Your Money

You will have to pay a small amount of money monthly if you have opted for a longer loan. However, as you are compensating for a prolonged period, your overall payment will be much larger than usual. 

Also, car loans usually always follow the rules of simple interest loans. Because, the longer you pay the money, the more your overall interest changes/increases. 

Myth – 5: Get Better Deal On A Rainy Day

Whether you believe it or not, this myth was pretty popular during a specific period. However, needless to say, the statement is absolutely false as well. 

A car dealership usually offers deals during various significant holidays, like Christmas Day, 1st January, Memorial Day, etc. 

Additionally, the timing or date of the same will depend on the dealer and their preferences. Hence, if you have a favorite someone (i.e., car brand), try to keep tabs on their schedules. 

Myth – 6: Making An Error Leads To Getting Stuck With Bad Loan 

We, human beings, are prone to making mistakes, especially if we are trying something for the first time. Sometimes, it can be pretty costly, while, in other cases, you can turn things around pretty quickly. And, thankfully, making a wrong choice while choosing a car loan provider falls into the second category. 

If you make an error during your first try, we would suggest you shop around a little and refinance your loan at a better interest. This way, you can avoid the issues of interest rate fluctuations and save your money. 

Myth – 7: Getting Rejected Once Equals To No More Approvals 

Usually, every auto loan lender tends to have its own criteria for approving a loan request. Hence, just because someone has turned you down doesn’t mean that everyone will do the same. Also, there are several lenders out there who can help you with bad credit scores and secure financing for taking a loan.

Conclusion 

Completing the whole documentation procedure and getting an auto loan can be confusing altogether. And, if you are neck-deep in misconceptions, things will get even more critical for you.

Through this article, we have tried to help you debunk some myths to lessen your skepticism a little. Hopefully, now, it will all work out for you!