How to get the best deal on a car loan

Apart from purchasing a home, purchasing a new car may be the most significant financial commitment you make. As a matter of fact, when you add up all the money you spend on cars over the years, it may well be equal to or even greater than the cost of the roof over your head.

When you consider the price of the average new car, it is easy to see why getting the best possible deal on your next car loan is so important. Car loans are available from a wide variety of sources, so it is important to shop around for the best one.

Car loans are available from banks, credit unions, car dealers and a variety of other sources. It is important to shop around at all these sources when looking for a loan on a new car. Many times the dealer will offer their own financing options, and they may or may not be the right move. Before agreeing to the financing offered by the dealer, it is important to compare it to the financing you can get on your own.

Many car shoppers do not realize that some banks and savings and loan associations offer the ability for their customers to get pre-approved for a car loan. The pre-approval process is generally very straightforward, requiring only verification of income and some other financial information. After the pre-approval process has been completed, the car shopper knows exactly how much he or she can spend on a car, and approximately what the monthly payments will be.

When shopping for a car and a car loan, it is important to keep the two transactions separate, and not buy a car based on the monthly loan payments. Rather, it is best to negotiate the price of the car first, getting the best deal you possibly can. After the best price has been negotiated on the car, then financing options can be arranged.

Having a pre-approval for a car loan in hand can also give you additional negotiating power when buying the car. If the dealer already knows you have financing, he or she may be willing to work with you to get the price you need.

When it comes to getting the best interest rate on the car loan, that will largely be a function of your credit report and your credit score. The credit score plays a large role in determining the interest rate of any loan product, including the car loan. Even so, it pays to shop around, since the interest rate on the same car loan for the same borrower can vary from lender to lender.

<<< back

We do not purport to offer financial advise, the articles shown on these pages are written by third parties and any information contained therein is NOT to be taken as financial advice.

LOANS SECURED ON YOUR HOME THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 12.8% APR Typical Variable