When you approach a financial institution about buying a car, they will consult a guide such as the Kelley Blue Book or the NADA guide in order to determine the value of the vehicle. Banks and other institutions will not typically lend out more than the car’s value, leaving it up to the buyer to cover any discrepancies with a down payment. To avoid paying more than you wish, you can determine a value estimate by consulting these books yourself before you approach the bank. Once you know what they are willing to loan, you will be better able to assess your budget for buying the car.
The first step toward getting your car loan is to fill out the loan application with the bank or financial institution you wish to borrow money from. In order to fill out this application you will need to provide your driver’s license, prove that you have automobile insurance, and include a statement of your monthly income. At this point you can ask for the amount of money you require as well as request how many monthly payments you wish to make. Keep in mind that these kinds of loans typically last 36 to 60 months. It is true that longer loans have less expensive monthly payments, but the interest rate will increase if you ask for a longer term.
Once you are approved for the loan, the bank will give the money to the dealer or private seller. On the other hand, if you are applying for the loan directly with the car dealership, your monthly payments will go directly to them. The same applies to the car’s title. Once the loan is approved, the title of the vehicle will go to you with the bank or other financial institution as the co-signer. The bank does this in order to ensure that the title and ownership of the vehicle are not transferred without their knowledge. Once the loan is paid off, the bank’s name will be removed from the title.
By consulting Kelley Blue Book value or NADA guide, you can calculate the estimated price at which you should buy a used car. NADA Blue Book Value is slightly higher than Kelley Blue Book value due to the fact that NADA used car value does not considers the condition of the vehicle. Which is the reason why NADA used car value is not considered most of the time. These Blue Book value can help you plan your budget effectively.
