You’ve got your eye on that shiny new Lexus; Okay, maybe it’s a Kia, but it’s perfect and you want it to be yours, all yours, as soon as possible. At the same time, you certainly don’t want to have to pay almost double the value of the car by the time you pay off the car loan. Here are five tips to help you get the best interest rate possible on an auto loan to put the car of your dreams in your driveway.
1. Check your credit score.
If you don’t already know what’s on your credit report, now is a good time to find out. Before you apply for an auto loan, get a copy of your credit report to find out what surprises may be lurking there. You may find that it contains misinformation that needs to be corrected, or that there is something negative about it that can easily be explained or fixed with a couple of phone calls or letters. Either way, it’s always helpful to know what the credit reporting agencies say about you before you start shopping for a loan.
2. If you have good to excellent credit…
…then you may qualify for special incentive financing available through the car dealer. If the car dealer offers a very low financing rate, review all terms and conditions carefully IN ADVANCE online to make sure you qualify. Most of the time, that 1% financing rate is reserved for those who have excellent credit and can afford to do a 12-month financing plan. If that’s you, then grab the deal. The 1-2% financing is a bargain if you can handle the other terms and conditions attached.
3. If you need a term of more than 12 months or have irregular credit…
…organize your financing yourself before you set foot on the car lot. Check with your regular bank first for a new car loan, as they may have better interest rates for those who are already established customers, or who have all their savings, checking and loan accounts through one bank. It can save you a few percentage points in interest by doing business with someone you already know.
4. Shop online for the best car loan available.
On many online credit websites, you can submit a request for multiple quotes from area financial agencies and loan companies. Simply submit your auto loan quote request through an online form, and the website will send it to up to four finance companies at once. A representative from each agency will contact you within a few hours to a day or two to discuss your application and give you a quote for the interest rate and monthly payment amount they can offer you. Online credit shopping makes it easy to compare and choose the best auto loan terms for you.
5. If your credit is bad but you need it because…
…one of your best and most often overlooked options is to find someone to co-sign the loan for you. In most cases, when you have a cosigner, you’ll get the interest rate THEY qualify for, which means a lower monthly payment for you.
