5 Tips for Getting the Best Auto Loan Rates
Auto loans are a great way to finance the purchase of a vehicle. But with that loan comes interest, and the lower the rate, the better it is for you. Here are 5 tips that can help you get the best auto loan rates.
1. Improve Your Credit Score
Having a good credit score is the first step to getting a low auto loan rate. If your credit score is lower than you’d like, there are a few things you can do to improve it. Start by making sure you pay your credit cards on time, this shows lenders that you are responsible. Keep your credit utilization ratio low, this is the ratio of the amount of credit you are using compared to your total credit availability. Finally, be sure to get rid of any bad marks on your credit report, such as an unpaid medical bill or a past-due loan.
2. Shop Around
Don’t settle for the first auto loan you find. Shop around and compare rates before making any decisions. Ask your bank, credit union, and other lenders such as online car loan aggregators for quotes. You can also use car loan marketplace websites to compare rates from different lenders. This is also a great way to see what kind of loan terms and rates other people are getting, which can help you in negotiating with lenders.
3. Haggle for a Better Rate
Most lenders will be willing to negotiate the terms and rates of an auto loan, including the annual percentage rate (APR) and loan length. If you’ve secured multiple quotes from different lenders, use them to negotiate a better rate. Lenders want to make sure they get your business, so they may be willing to lower the APR or extend the loan term if you tell them you’re looking for more favorable terms elsewhere.
4. Get Pre-Approved
Another way to get the best auto loan rates is to get pre-approved. This means that you fill out an application and the lender approves you for a loan before you go car shopping. Pre-approvals usually come with a “good faith estimate” of the loan’s terms. This is a helpful tool because it will show you the exact rate you’ll be paying, as well as any fees associated with the loan.
5. Make a Substantial Down Payment
The larger the down payment you’re able to make on your car, the lower your monthly payments will be. This can also help you secure a lower interest rate because lenders will see you as a lower risk borrower. So if you’re able to make a substantial down payment, don’t hesitate to do so.
By following these tips, you’ll be on your way to getting the best auto loan rates. Start your journey today and click here to shop for great auto loan rates!
