If you need a new whip, you might be wondering how to get the best car loan rates. Well, buckle up. We know a few ways to make car-buying easy on your wallet. Think of it as your financial GPS.
For starters, look up your credit score. The higher it is, the lower your car loan rates will be. 800-850 score is the best. 740-799 is pretty good. 670-739 is good. 580-699 is less than good. And 300-579 is considered poor.
If your score is low, you can work on improving it by paying bills on time, reducing credit card balances, and avoiding new credit audits.
Next is to research and compare the best auto loan rates offered by various lenders. Most provide online tools to help you find the most competitive options. Take a gander at dealer financing, banks, credit unions, and online lenders. You'll want to secure quotes from at least three lenders to make an informed decision.
If you want to buy your car from a private party rather than a dealer, make sure the lenders you've chosen allow it.
Don't shy away from negotiating the interest rate with the lender. If you have a strong credit score, you have leverage to get a lower rate. Even a small drop in the interest rate can save big bucks over the life of the loan.
Now, it's time to get pre-approved before visiting the dealership. Knowing your budget and qualified rate gives you a distinct advantage in haggling better terms with the salesperson.
Longer loan terms mean paying more in the long run. They may seem appealing due to lower monthly payments, but what you pay in interest is like flushing your funds down the toilet. Aim for a shorter loan term if you can comfortably afford the higher monthly payment.
A larger down payment helps secure a lower interest rate and reduce the loan amount. If you can, put down at least 20% of the car's purchase price. Not only will this boost your chances of approval, but it will also shrink the overall cost of the loan.
If you're trading in your current car, you can get an instant no-pressure offer from Peddle to see how much it's worth. That way, if the dealership offers you less, you can sell your car to us and put that money toward your down payment.