#auto loan interest rates
How to Get the Best Car Interest Rates
By Emily Delbridge. Car Insurance and Loans Expert
Emily Sue Delbridge has a strong family history in the insurance industry. She has been in the insurance business since 2005 with her primary focus on personal lines insurance. Read more
Getting the best interest rate possible on a car can save you hundreds if not thousands of dollars on the total cost of your car purchase. It is not always possible to get the best interest rates like you see advertised on TV, but it is possible to get a good interest rate if you prepare ahead of time. Learn what it takes to get the best interest rate on your next big car purchase.
The best interest rates are reserved for brand new cars. It has been possible in the past to even get a zero percent interest rate, but it only applies to new vehicles. Interest rates are always changing so zero percent auto loans are not common but lower rates on new cars is common. Occasionally the interest rate can be so much lower on a new vehicle compared to a used, your overall cost can be the same on a new vehicle as it would be on a used.
Credit scores affect a wide variety of your financial buying power from car loans to mortgages to your car insurance rates. The best scores get the best interest rates. Monitor your credit score by doing an annual credit score check. Pay all your bills on time but most importantly credit cards, personal loans, car loans, and mortgages. Get behind on any of those types of payments and your credit score will plummet. Even being late one month can make your score drop a lot of points. Another credit score tip is to have more credit than debt.
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For instance, having a credit card with a limit of $15,000 and only using $3000 of the available credit gives you a healthier credit score verses maxing out your cards.
Get a Co-Signer : A co-signer does not guarantee a lower interest rate on your car loan. The better credit score your co-signer has the better chance you have of getting a lower interest rate. Some lenders only allow you to be eligible for a car loan if you have a co-signer. Meaning the lender still calculates the interest rate of the car loan based on your credit history. A co-signer can definitely make a huge difference in whether or not you get a car loan, but interest rate savings might be minimal.
Shop Around : Do not underestimate the difference shopping around for a car loan can make on your interest rate. Car dealers, credit unions. banks and other lenders can all have different interest rates at different times. You might be more comfortable dealing directly with your credit union, but it might be surprising what the car dealership can offer in terms of interest rates. It all hinges on your credit history and likelihood of the lender getting their money back. Spending a little extra time shopping for the best interest rate can save you a bundle in the long run.