WASHINGTON, D.C. — As Financial Literacy Month continues, Americans
Well-informed on Automobile Retailing Economics wanted to clear up some common
vehicle financing misconceptions.

Officials from the educational coalition explained that common
vehicle financing myths can knock car shoppers off course. To help consumers
make informed choices, the AWARE broke down a series of common mistaken beliefs

MYTH 1: The Annual Percentage Rate (APR) on vehicle
financing cannot be negotiated.

FACT: Customers usually can negotiate the APR and payment
terms, just as they can negotiate the price of the vehicle. The federal
government has even said, "You may be able to save a lot of money over the life
of the loan by negotiating the interest rate."

MYTH 2: Consumers get the best deal when financing a vehicle
through a credit union.

FACT: Credit unions, banks and dealerships all offer
competitive rates. Car buyers should shop around and compare rates — and
restrictions — to find the best deal for them.

MYTH 3: Shopping around for vehicle financing negatively
impacts a consumer's credit score.

FACT: While shopping around for vehicle financing may cause
multiple creditors to request a consumer's credit report, an individual's
credit score will not be negatively affected if the inquiries are made within a
14-day period.

MYTH 4: Credit insurance and extended service contracts are
required when financing a vehicle.

FACT: Credit insurance and other service products are
optional. Consumers should learn about the value provided by these products and
only sign up for the ones that they would like to purchase.

MYTH 5: Vehicle buyers are required to use in-dealership
financing.

FACT: Financing arranged by a dealership is offered as a
convenience and is OPTIONAL. Consumers looking to finance a vehicle purchase
should shop around to find the best financing terms that meet their needs. 

"Financing is a critical part of the car-buying experience
for many," AWARE spokesman Eric Hoffman said. "Consumers help themselves by
learning the facts about the process."

Hoffman urged anyone looking to finance a vehicle to spend
as much time shopping for financing as they spend looking for the right
automobile. 

AWARE is a vehicle financing industry coalition to help
consumers understand how auto financing works. The group provides potential
buyers of new and used autos with the tools and resources they need to
successfully navigate the auto financing process.

AWARE's members include: American Financial Services
Association, National Automobile Dealers Association, National Association of
Minority Automobile Dealers, American International Automobile Dealers
Association, Ally Financial, American Honda Finance Corp., American Suzuki
Financial Services, AutoNation, Ford Motor Credit Company, GM Financial, Group
1 Automotive, Inc., Lithia Motors, National Auto Finance Co., Nissan Motor
Acceptance Corp., Saab Financial Services Corp., Sonic Automotive, Southeast
Toyota Finance, Toyota Financial Services, United Auto Group and Wells Fargo
Dealer Services.

Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.