15 Tricky Questions Consumers Ask About Auto Finance

Any company needs to anticipate the questions their consumers will ask — before they ask them — in order to create a positive customer experience.

Auto finance is no different.

In fact, since auto loans and leases are relatively complex products compared to, say, neckties, lenders should do more upfront work to anticipate consumer inquiries. A notable place to look for those questions is Quora, which is a question-and-answer site where questions are asked, answered, edited, and organized by its community of user. Here are 15 questions that appear to be the trickiest for an auto finance provider to answer. Get the sales team to master these, and you’ll be ahead of the game:

1. What should I look for in a car loan?
2. How does prepayment of a loan impact credit score?
3. How does taking out a car loan help with taxes?
4. Why do I have to put a down payment on a car?
5. When is it better to lease a car versus financing its purchase with an auto loan? How do the economics differ? Is there a break-even, indifference point? What’s the “damage” to one’s pocketbook?
6. Why are interest rates higher on a loan for a used car?
7. Should I get a car through vehicle finance with a balloon payment? What are my options if I agree to the residual?
8. Why is it, even though I have a very good credit score, that I didn’t get a good interest rate on an auto loan because I had less than two years of credit history? Is that valid?
9. Why is my car loan showing as a negative on my credit report?
10. How do credit unions or captives even make money by offering 1% auto loans?
11. How will paying off my car loan three years in advance affect my credit score?
12. Why is it that some car loans end up underwater when cars are supposed to depreciate, unlike houses?
13. What are the cons of refinancing my car?
14. For someone who has less credit history, and hence an average credit score, is it a good idea to get an auto loan, even if he can buy the vehicle outright?
15. I’m $7,000 upside down in my vehicle and can’t afford the payment anymore. What’s the smartest thing to do?