Very few people can afford to pay cash for a new car. Even if you can actually afford to do so, it is usually more convenient to look for finance. There is no point in paying more than necessary, so it makes sense to make sure you get the best car loan interest rate.
Car Loan Interest Rate
When you are looking for finance for your vehicle, you will find a lot of providers competing for your business. The dealers from whom you buy the vehicle will certainly want to provide the finance, because they may well make more money on this than on the actual sale. On the Internet or in TV advertisements you will see a host of tempting offers to lure you in. However, the rates you actually get may vary considerably from these headline rates, so you need to know how to find the best deals.
The major factor that determines your rate is your credit score, with Tier A and B borrowers qualifying for the lowest rates. It is extremely important for you to pay a few dollars to find out your score before you start applying for finance, as providers may try to charge you a rate that is too high. If your score is on a borderline, you can sometimes get a better rate by increasing your down payment.
Once you know your score, you can start your applications. It is strongly recommended that you have a loan agreed before you even start shopping for your vehicle. The best rates are often obtained from online lenders, and credit unions can usually beat these for their members. Once you have this agreed, you can approach your dealership knowing that they will have to beat this rate in order to get your finance business. Bear in mind that a zero percent interest rate from a dealer is not as advantageous as it may appear, as you usually have to choose between that and a cash rebate.
Never forget that getting a good price on your new vehicle is only half the battle. If you fail to get a good car loan interest rate, you risk canceling out all the savings you make on your purchase. The secret of getting the best deal is knowing what you are entitled to, and taking time to shop around.
