CFPB Unveils New Know Before You Owe Auto Loan Shopping Sheet
The CFPB recently unveiled a Know Before You Owe Auto Loan Shopping Sheet to help consumers avoid the common pitfalls of taking out an auto loan and to understand how to compare auto loan offers, see the total cost, and negotiate the best deal for themselves. The CFPB encourages consumers to print out the informative two-page worksheet and to use it at banks, credit unions, dealerships, and other lenders when inquiring about and comparing auto loan offers. The CFPB indicates that finding and comparing loan choices will help consumers get a better deal, potentially saving them hundreds or thousands of dollars.
The worksheet helps consumers budget and keep track of multiple factors that affect the total cost of the auto loan. While consumers may know that they can negotiate over the price of the vehicle and the interest rate, the CFPB reminds consumers that it is also important to know all the other factors they can negotiate that may impact the total cost of the loan. Thus, the worksheet contains a helpful icon next to each negotiable factor to remind consumers which factor is indeed negotiable. These factors include fees such as delivery charges, origination fees, preparation fees, down payments, and the trade-in value of a vehicle if the consumer already owns a vehicle.
In addition to the Shopping Sheet, the CFPB offers other online resources to help consumers shop for an auto loan as a part of its Know Before You Owe initiative. This includes a step-by-step guide (“Take Control of Your Auto Loan”) that walks consumers through each step of the auto finance process, from budgeting to negotiating the auto loan to closing the deal. The CFPB also released a report entitled “Consumer Voices on Automobile Financing” that describes its research on how consumers approach auto financing decisions and the challenges they face in navigating the process. The research concludes that while consumers diligently research the type of vehicles they want to buy, they do not fully explore the available financing options. Hence, the CFPB Auto Loan guide and Shopping Sheet aim to better educate consumers on financing their auto loans.
The Know Before You Owe Auto Loan Shopping Sheet is available here: http://files.consumerfinance.gov/f/documents/201606_cfpb_auto-loan-worksheet.pdf.
The step-by-step consumer guide entitled “Take Control of Your Auto Loan” is available here: http://files.consumerfinance.gov/f/documents/201606_cfpb_take-control-of-your-auto-loan-guide.pdf.
The CFPB’s suite of consumer resources regarding auto loans can be found at: http://www.consumerfinance.gov/consumer-tools/auto-loans/.
