Get a Good Rate on an Auto Loan

You’ve just found the perfect car to buy, and now you need an auto loan. If you plan ahead, you can get a good rate for an auto loan.

Shop around. Before financing with the dealership see what rates credit unions and local banks have to offer. Auto loan rates vary, and credit unions often have lower rates than banks.

Ask your bank if you can get preapproved for an auto loan. You’ll have better negotiating power with the dealer if you already know how much money you qualify to borrow.

Don’t tell the dealer what you want your monthly payment to be. They can adjust the price of the car or the interest rate to match your figure, but it will most likely benefit them and not you.

Avoid “no money down” or very low down payment options. Without putting money down your loan will be high, and you’ll have to pay a lot of interest.

Go with the shortest-term loan you can afford. Many banks offer low interest rates for short term financing and you’ll pay less interest with a short-term loan.

Tips & Warnings

• Sometimes dealers offer low car loan interest rates but then jack up the price of the car to compensate. Don’t be fooled.
  

By eHow Contributing Writer