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GMAC Loans: How to Get the Lowest Rate


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Using GMAC loans to finance a new or used car is a popular option, especially if you are buying a GM vehicle. If you decide to use GMAC it does limit your options a bit on negotiations and terms, but there are a few things you can do to make sure you get the best loan possible. Follow these tips to get the best rate on a GMAC loan.

What is GMAC? - GMAC was founded in 1919 as a subsidiary of GM to help finance vehicles for both dealers and customers. Controlling interest was sold to a group of private investors in 2006, and as of 2009, the US government owns roughly 35% of the company after providing loans to prevent it from slipping into bankruptcy.

GMAC Loans - Getting a loan from GMAC is handled the same way as any other loan. GM dealers will often push GMAC loans as the best option to their customers, but it is by no means the only way to finance a GM vehicle. If you decide to use GMAC when buying a vehicle, it does take away some of your negotiating power as you are not shopping around for the best rate. However, it will often make the entire loan process convenient and straightforward.

Shop Other Dealers - If you are not satisfied with the new car loan rate or terms that are being offered to you, try finding another dealer that carries the same vehicle. Terms and rates can vary by dealers, but they'll usually offer incentives that are specific to their dealership. Call around your local area, and if you don't mind traveling a bit to get a deal, it never hurts to check dealerships throughout your state.

Credit Report - Your credit score will have a big effect on your rate and terms. Check your credit report on a yearly basis. If there is any inaccurate information on your report, be sure to report it as soon as possible. Removing any incorrect and adverse information will help raise your credit score.

Down Payment - The larger your down payment, the better rate and terms you will be offered. Try to get together a 20% down payment. This will assure you the best loan rate possible.

Co-Signer - Having a co-signer can help get you a better rate. If your credit score is low enough to be considered sub-prime, you may need a co-signer just to get a loan. A co-signer should have an excellent credit score and be willing to make the loan payment should you not be able to.

Sub Prime - If your credit score is less than 600, be prepared for a much higher interest rate and more demanding loan terms. It might pay to put off the car purchase and work to improve your credit score and reapply when you have gotten your score up to 700 or so.

Shop Around - If you're not happy with the rate and terms that GMAC is willing to offer you, it can be in your best interest to shop around outside of the GMAC auto finance system. There are numerous places to get a loan, including banks, credit unions and finance companies.

Using GMAC loans can be convenient especially if you're purchasing a GM vehicle. Following these tips can help you secure the best rates and terms on your vehicle.

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