According to Informa Research Services Pre-Approved Auto Loans Can Save You Bundles of Cash off Year-End Clearance Models

CALABASAS, Calif.--According to Informa Research Services, as the world’s top automakers prepare to launch their new 2007 models at this year's auto shows, many consumers are turning to online sites like MSN Money (http://moneycentral.msn.com/loan/loan.aspx?iType=3) for the best financing deals.

With consumer spending down as a result of high-gas prices, and the average new vehicle loan at $24,000 (up from $20,000 six years ago), obtaining a good finance package has become the leading factor in the purchase process. Nearly 57% plan to evaluate “multiple financing sources” before buying, according to a recent survey conducted by a national lender.

What’s driving consumers' buying behavior are loans and purchase price. “A difference of a couple of percentage points can save or add about $1,500 in finance charges to a $25,000 loan,” according to Mavel Vargas, Senior Manager of Loan Products for Informa Research Services. “That’s why shopping for financing before you purchase your next car can save you hundreds of dollars per year.”

To encourage consumers to buy, many of the large manufacturers are pushing creative financing options like “zero percent” or “factory rebates” on select models. Even smaller manufacturers have partnered up with national lending firms like Chase and Capital One, leaving them vulnerable to absorb finance charges and account for profits elsewhere – usually in the sticker price of the vehicle. Knowing the “ins” and “outs” of dealer financing ahead of time can give you the leverage to overcome intimidating sales tactics.

For instance, not all zero percent financing deals are without their pitfalls and not everyone qualifies for a loan. Some loans are limited to shorter three-year terms which can be the difference between a higher monthly payment or a greater down payment. The actual loan amount, term and percentage rate you receive is directly tied to your credit score and ability to repay. This has left many consumers who don’t qualify turning to banks or credit unions for financing at the expense of qualifying for a great year-end deal.

Before you visit a dealer, it’s best to figure out your financing so you know exactly what you can afford. Using a payment calculator and rate tables like the ones located at MSN Money can assist in making your car buying experience more pleasant.

Remember, the dealerships’ goal is to do whatever it takes to move inventory off the lot. Having your financing pre-approved, whether from a traditional brick-and-mortar bank or online lender, can give you the competitive edge you need to negotiate the options you really want (e.g., moon roof, leather interior, GPS navigation system, etc.) while saving you a bundle off your next purchase.

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About Informa Research Services, Inc. (www.informars.com)

Since 1983, Informa Research Services, Inc., has provided the financial industry's most extensive array of market research and decision-support information. Our extensive financial product database is a popular source of licensed editorial content for financial portals, websites, newspapers, and magazines, attracting major Internet partners, including MSN, Yahoo! Finance, The Motley Fool, RealEstateJournal.com, Quicken, ABC, MyFico.com, Equifax, and Edmunds.com.