How To Avoid Car Refinance Scams

Purchasing a new car leaves you open to a dealer’s scams. Many of the scams you’ll come across when you refinance your car loan are the same as you saw when you bought your car. Here are our best tips to help young people (especially) avoid all the common finance scams:

tell the truth about your debt load and credit rating

get your own credit score and keep it handy

don’t make a cash deposit when you’re financing your loan, because if the deal goes bad you may have trouble getting it back

if you’re a recent college graduate, don’t apply for a car loan until you’ve been employed for at least six months

look for a loan online, where the competition is more intense and the deals are better

get your credit score to at least 680 before you apply for a loan

try to pay off your credit card debts before you look for a new car

if you’ve recently moved, wait six months before applying for a loan. Your addresses are always verified. If you move a lot, lenders won’t trust that they can keep track of you in the case your payments are late

having been approved for a loan in the past helps

don’t get a co-signer for your loan because the loan is often put in the other person’s name

don’t let a good price on a vehicle be offset by a higher-than-necessary interest rate. Auto loans are relatively easy to get. First, lending institutions know they’ll get their money back because the loan is backed by the collateral of the vehicle. If you don’t make the payments, the lender will repossess the car. Financing your car loan is a huge source of extra profit for car dealers.

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