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

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Get a Low Interest Rate Car loan

Car salesmen are all in the business of making as much money as possible. One of the tactics car finance managers use is illegal mark ups on your interest rate. What happens is, you go into the car lot and find the car of your dreams. The car salesman will have you apply for financing. Just by looking at your FICO or credit score, the finance manager has a general idea of what your interest rate is going to be. Instead of giving you the interest rate you qualify for, they add a few points on to the interest rate you qualify for, and the dealerships will then make even more money by pocketing the interest that they have added on. Yes this is illegal, but yes it does happen everyday. Here is how to avoid being a victim of illegal interest rate scams.

Check your credit report. Dispute any mistakes you find as soon as you can. If you have excellent credit, then you should get the best interest rates available.

Learn what the current interest rates are on new and used cars. You can find out this information by simply calling your local financial institution.

When you visit the dealership tell them that you are aware of this illegal interest rate mark up scam and that you will press charges if they try this on you.

Tell the finance manager you want to see something in writing from the bank or finance company with the interest rate that you qualify for listed. Explain to them that you will even call the company yourself and ask about the interest rate they are offering to you, and see if it matches what the bank has qualified you for.

Never sign an agreement that has blank or incomplete information. Especially where the interest rate should be. Make sure that your interest rate is listed on your contract and don't hesitate to walk away from the deal if the finance manage is unable to provide you with the interest rate in writing. Once you have signed a contract, you are now legally responsible for anything they add to those blank lines.

Tips & Warnings

• Call around to find current interest rates on new and used cars
• Tell the dealer that you are aware of the illegal interest rate hike tactics and you will press charges if it happens to you.
  

By coffeefirst eHow Community Member

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