With a variety of options available, it can be tough to choose the best auto dealer loan. When dealerships take your credit information, it can be difficult to guess what can happen next. The dealership could complete your paperwork and get you on the road quickly, or you could fall victim to dealer scams that happen in the finance and insurance office. These tips will help you choose the best loan from among competing offers.
The Best Rate: Although buyers are conditioned to want the best rate possible, think twice before accepting a low rate offer from the bank. Contact a dealer via Autos.com or visit manufacturer’s websites to see if there are any manufacturer-backed low interest rates available. The difference between 5% APR and 0% APR could save you thousands of dollars in interest on an expensive vehicle. Loan certification by manufacturers means there could be rates as low as 0% available.
Find an Honest Dealer: When you visit a dealership, ask to speak with the finance manager as soon as you agree on a selling price for the vehicle. Let the finance manager know you are looking for a competitive quote and you want to know what the “buy rate” is. This will let the finance manager know you expect a fair deal and that the rate cannot be marked up. Rate markup is an important profit center for the dealership.
No Prepayment Penalties: If two loan offers are nearly identical, choose the one without a prepayment penalty. You may spend hundreds of dollars in early payoff penalties if you choose the wrong lender. If you already have a loan with a prepayment penalty, you may want to think about loan refinancing.
By following these tips and shopping around for the best rate possible, you can be sure you get the best auto dealer loan. Remember, if you have any specific questions regarding a loan or interest rate, contact the dealership’s finance manager or the lender directly.