When you go shopping for a new car, you also need to shop for bank auto loans. The interest rate you get can not only determine how much you pay for your vehicle, it can also be a deciding factor in determining what car you can actually afford. Here are a few tips to make sure you get the best car loan rates possible.
Before you talk to a lender, make sure you get a copy of your credit report. There are plenty of websites that will help you get this information, and you are allowed by law to get one free copy (per year) of your report from each of the three credit bureaus. Your credit history is a deciding factor in your getting an auto loan, and once you’ve been approved, it will determine your interest rate as well. Take a look at your credit report, and if you spot any inaccuracies, get rid of them.
Many lenders won’t even talk to you until you know exactly what kind of car you want to buy. Once you’ve chosen a car, and you know your credit standing, you can begin looking for car loan lenders. When you’re looking for bank auto loans, it’s a good idea to go through an outside lender. If you go through the dealership’s preferred lender, they’ll encourage you to buy a certain model or brand. If your lender has no vested interest in the brand or model of car you buy, you have a greater chance of getting a loan with a lower interest rate.
A bank car loan is ideal, and credit unions typically offer them as well. In fact, credit unions usually have loans at lower rates. A bank or credit union will give you a realistic starting point as far as interest rates are concerned. For example, if your bank offers you a loan at 5%, and then the dealer’s in-house finance company offers you a “low rate” of 7%, you’ll know you’re being “taken for a ride”. It doesn’t matter to your bank’s loan officer what kind of car you’re buying or how much it costs. They are honest and objective, and they’ll usually try to get you a good deal.
If you have great credit, you may even be able to get a car loan with zero interest. A dealer will often try to beat the interest rates offered by your bank, so if you come to them with a low offer, they’ll often give you a lower rate than they otherwise would have given. The auto dealer doesn’t want to lose your business, so they’ll be ready to deal. It’s a win-win situation, because they get the interest you’ll be paying, and you save money.
As with any other purchase, you should comparison shop for bank auto loans. With a little work, a bit of luck and some patience, you might find the deal of a lifetime on the car you want.