10 Questions to Ask Your Lender Before You Buy a Car

Buying a car isn't difficult if you have the money for it; it's another story if you don't have enough cash to buy one right now. And while getting [a car loan>(https://www.carmudi.com.ph/journal/seriously-can-you-really-afford-a-car-loan-right-now/) might seem like you're getting scrutinized by the lender, it's also important to ask questions and see if you can trust and work with them as well. The best way to do this is to prepare questions beforehand. Here are some of the more important ones you need to include on your list:

## 1. What's really the interest rate I'm paying for this loan?
There are a couple of interest rates you'll encounter when taking a loan, but make sure you know the most important one: Your APR (annual percentage rate). This is the actual interest rate you will have to pay every year depending on your loan's unpaid balance.

## 2. What are the documents needed and the processing time?
It's important to know the required documents you need to submit, and how long they’ll be processed. That way, you can submit them in time and prevent possible penalties.

## 3. How long should I pay the loan?
It's important that you know the terms of the deal – or how long you'll pay for it. Remember that the longer your car loan, the higher the interest rate, and the more money you need to spend. It's always best to pay everything as soon as possible.

## 4. What are the other fees and / or hidden charges?
What are the extra charges that you need to pay during the entire loan term? Are there any hidden charges that might possibly turn into penalties?
Remember that you will need to pay for additional fees like sales tax, documentations fees, title tax, and many others. There are even dealers that will give additional fees just to earn more profit.
The more you know what these are, the more you can make a decision if buying the car is worth it—or not.

## 5. What are the possible penalties that I might get in my loan?
In case you pay late, what will be the penalties? Can you also make an earlier payment without getting any penalties along the way?

## 6. Can it be possible to negotiate the interest rates?
It might be possible to renegotiate for an interest rate if you've been loyal to the bank you're lending from, or you have a good history of paying your previous loans with them.

## 7. How much is the exact price I'm paying for the vehicle? Can you give a breakdown of where the fees are going?
It’s important that you know where exactly your money is going. So if you find a discrepancy somewhere, then you can pinpoint specifically where the real trouble is and take steps to fix it. Some of the important things you need to ask yourself are the following:
- How much is the specific price you're going to pay for the vehicle?
- How much is the total amount that will be financed?
- How much is the credit or finance charge?

## 8. Are there dealer add-ons in the car?
The most standard / basic vehicles often don't come with a lot of options, such as additional accessories, paint-protection, nitrogen tires, and more. There are times when dealers will add these options to make them easier to sell. If you're on a tight budget, it's best to just go without the options and go with the standard models.

## 9. Has the car been damaged before?
Cars are often shipped from other countries, and when that happens, it's possible that they’ll get hit or scratched during transport. When that happens, these companies will try to cover it, but you can see the difference if you look closer.
And another important thing: there are lemon cars that were proven defective when they were bought by a customer, so they had to be returned back to the car dealer. If the car can’t be repaired, the dealer will often give a new replacement for the car.
So what happens to the defective / damaged vehicle? They can take it back to the car manufacturer, or they’ll fix it like brand new and sell it again – that’s what you need to be careful about.

## 10. Is that your final price?
Sometimes, it wouldn't hurt to haggle for the price. Go online before you go to the dealer, and research for the actual price of your dream vehicle. Once you’ve made a list, then it’s time to go out and check the prices in car dealers. If there's a huge difference between the actual price and the dealer's price, then be prepared to haggle -- or walk away, if you don't get a fair deal.