Understanding Financing a Car and Auto Insurance Requirements

If you are wanting to purchase a new or used car in Longmont, CO, it is important that you understand your car financing options as well as insurance requirements. Here is a quick overview of various financing options and a simple way to understand what type of insurance you need.

Understanding Your Credit Score

Before you decide to go to a dealership, you should take the time to check your credit report. You will need to do this because, unlike credit cards and mortgages, there are ways to purchase a vehicle even with bad credit; however, the higher your credit score, the more likely you are to get a good interest rate. There are free tools online you can use, such as Credit Karma, that are designed to give you a better understanding of what bracket your credit score falls into.

Get Financing Quotes

For those of you who have perfect credit, you will be able to visit a dealership and obtain the best financing rates. If you do not have the best credit, though, there is no need to fret because there are plenty of financing options. For starters, you can try out an online lender. To do this, you will need to complete your credit application online. The service provider will then use your credit score to match you with lenders who are willing to lend you money. An excellent advantage of quotes is that you are not required to use the loan you are being quoted on. Instead, you can compare quotes and choose one that works best for you and your financial situation.

Shorter Term is Better

If you get approved for a loan, it is best to go with a shorter payment plan because it will come with a lower interest rate. The downside to this is that your payments will be higher.

Contact Us Today

If you acquire an auto loan, the lender will likely mandate that you purchase an auto insurance policy with collision, comprehensive and liability coverage. If you don’t use a loan, however, a liability policy may be sufficient enough to meet the state’s minimum coverage requirements. Contact us today at 1st American Insurance Agency serving the Longmont, CO area to learn more about financing and auto insurance.