Since the interest is the fee for your loan, it’s natural to seek out the lowest car loan interest rate possible. The truth is that there is a wide range of figures depending on the applicant, the lender, and the overall economy. Focus on the things that you can control. For example, you can start with the following techniques to get a low rate:
Impress the Lender with Your Credit History
Whichever company you deal with, it will always be better if you have an excellent credit history to show them when you apply for a loan. This means that your previous loans should have no defaults. Make it a habit to pay your smaller debts quickly and without fail. This will serve you well once you are aiming for bigger loans. The lenders will trust you with their money knowing that you did well in the past. They will approve the loan right away and will even give you a favorable interest rate as a sign of faith. If you credit history isn’t stellar, then give yourself a year or so to improve it before the loan application.
Don’t Limit Yourself to One Option
Remember that there are countless lenders out there that can give you the money you need. You don’t need to limit yourself to the first one that you encounter. This is a common mistake among loan applicants. Often, they are offered financing by their dealership and they say yes to it without more thought. Yet they could enjoy far lesser rates if they only shopped around. Get at least three offers so that you can make comparisons. This will allow you to gauge whether the dealership loan is cheap or expensive.
Negotiate Until You Get a Sweeter Deal
If you find a better deal among your alternatives, then you can use this as an ace when negotiating with your dealership. Come back and tell them about it. Perhaps they will counter the offer with a better deal and end up with a great loan package. If not, then at least you will still end up with a lower rate than when you started.
Wait for a Low Interest Environment
Car Loans Interest Rate If you are not in a hurry to buy a new car, then just park your money in a low-risk investment. Wait for the environment to be favorable with the prevailing interest rates being way down compared to the usual. You can’t control the economy but you can improve your timing.