How To Get The Best Auto Loan Interest Rate
Once you’ve narrowed down your search for your next vehicle, it’s time to start thinking about how to get the best finance rate when the time comes to buy. No matter if you’re a first-time buyer or an experienced car-buying pro – there are a number of key steps you can take to ensure you’re getting the best rate on a used car. Basil Family Dealerships is standing by to help you shop with confidence and get the financing you need based on your own financial goals.
Tip #1 – Know Your Credit Score
While you might not be aware, your credit history and credit score are huge factors in determining the type of finance rate that you could potentially qualify for. In the most basic terms, a high credit score correlates with a lower interest rate. Used car buyers can use a number of different resources online to check their credit scores before heading to the dealership. You can also avoid any unexpected surprises by regularly monitoring your score, paying off existing debt, staying timely with your monthly bills, and keeping the number of additional credit inquiries to a minimum. Keeping your credit in good shape means you’ll typically spend less when financing your next vehicle.
Tips #2 – Research Your Rate
Shop online and compare auto loans in order to ensure that you’re getting the best rate for your situation. An excellent example is a car finance calculator that helps you select a monthly payment that you’re comfortable with. There are also certain lenders that specialize in helping credit-challenged borrowers get the financing they need. Simply take some time to make sure that you understand how their interest rates are structured and the terms of the loan repayment.
Tip #3 – Compare Total Loan Amounts Instead of Monthly Payments
A common tactic used by unethical lenders is to make your monthly payment look as low as possible. They do this by extending the payment term length to make the loan look more attractive. If you fall into this common trap, you could find yourself paying significantly more in interest charges over the lifespan of the loan. Don’t just look at monthly payment amounts when choosing a lender!
Tip #4 – Apply for Credit Within a Two-Week Period
Each time that you apply for an auto loan, a hard credit inquiry is generated. Fortunately, current FICO scoring models permit all new loan applications to count as a single inquiry when made during a two-week period. Known as “rate shopping”, this allows you to avoid negative impacts on your credit score. Most lenders allow you to prequalify on their websites to give you an estimate of potential offers, interest rates, and payments without pulling your credit. Getting pre-qualified is a great way to get educated and get a head start on the process.
Tip #5 – Read the Fine Print
After you get your quote, take some time to read the fine print thoroughly. Auto loans are binding agreements that you’ll be responsible for years to come, making it especially important to understand all the details. Look for things like prepayment penalties, loan processing and origination fees, and other miscellaneous charges added to the loan. This way, you’ll avoid any unpleasant surprises when you make your first car payment.
Our Team at Basil Family Dealerships is Here to Help!
Don’t let an auto loan be the only thing standing in your way when shopping for your next vehicle. Our team of finance experts will provide you with all the information and options you need to make an informed decision. We’re confident that we can help you find the best finance rate for your next vehicle purchase! Even if you have bad credit or no credit history at all, our Basil Says Yes program makes it possible for you to get approved. Visit the links below to learn more about Basil Says Yes and apply today.