Are you in the process of buying a car, and will need to finance your purchase with an auto loan? When it comes to applying for an auto loan, you’ll want to think beyond just getting approved and carefully consider the rate you’re being offered. After all, the lower the interest rate, the less you pay each month and the less you pay for the car overall. The following tips can help you get the best car loan rate possible:
Compare current rates both locally and nationally
Do some research and learn about the current interest rates on both a national and local level, and what the best possible rate is that’s being offered. When you make a decision about financing your car, you’ll have a few options, including credit unions, banks (whether it’s the bank you have your checking account with, or another bank entirely) and also the option to use the financing that is offered through the dealership. By knowing ahead of time what the best possible rate out there is, you’ll know if the offer you receive is a good or bad one.
Check your credit report
Your credit score is a key factor when determining your interest rate for any type of loan, and an auto loan is no different. Before you apply for your car loan, you’ll want to check your credit report to see where you stand. It’s more than just knowing what your credit score is, but also seeing what negative items are on your credit report, which could stand in your way of obtaining a car loan at all. Even if your credit is decent, taking care of delinquent accounts ahead of time can help your application process go much more smoothly. Not only can this increase your chances of getting approved, but you’ll also be more likely to get approved at a favorable rate. Whether it’s a past due item you aren’t aware of, a credit reporting error that needs to be corrected, or a bad credit score you weren’t even aware of, fixing these things prior to your car loan is the best way to get a low car loan rate.
Talk to the dealership
Are you buying your car at a dealership? If you are, ask about the loan options that are offered directly through the dealership and if there are any incentives for going with the bank they’ve partnered with. Because salespersons will usually receive commission on car loans as well, they might be able to offer you a better loan rate to convince you to go with their financing. Just remember to always compare all of your options and offers before making any final decisions, because it might seem like a good rate, but you may be able to receive an even better rate from your own bank. If you do receive a better rate, see if the dealership will be able to beat it.
Make a larger down payment
While it’s possible to receive a car loan with little to no money down, having a larger down payment can help to lower your interest rate. However, this isn’t a guarantee, and if you receive a high interest rate due to bad credit or other factors, a large down payment may or may not help. Even if your large down payment won’t help to lower your interest, it will help to lower your monthly car payments overall, so that’s always a plus.
Are you receiving annuity payments and need money to buy a car? Bypass the loan completely and purchase your car in cash, which can help you save money on your purchase overall. Contact Peachtree Financial Solutions today to learn more about selling some or all of your future annuity payments for a lump sum of cash.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.