Looking for a new car and want to get the best car loan rates? There are a few things that you need to know ahead of time. Here are the top 10 things I wish I knew to find the best auto loan rates.
Your credit union is typically the best possible place to start when you're looking for the best auto loan rates. You've already got a history there and they will work hard to give you the best deal.
Check out your credit union's online loan calculator to get an idea of what type of loan you might be eligible for. Based on what you can afford to pay every month, you can find out how much you might qualify for.
Before you try to get the best auto loan rates, check on your credit. You can get a free copy of your credit report from each major agency (Equifax, TransUnion, and Experian) once a year. Don't assume that every report is the same, either: sometimes you may discover significant discrepancies that need correction. The average credit score in the U.S. is 695. If yours is that high or higher, you may be able to qualify for some good rates.
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If there are mistakes on your credit report, you can now initiate disputes either online or by mail. While it may take a few weeks to hear back from the credit reporting agency regarding the outcome, it's still important to get this done as soon as possible while you're looking for the best auto loan rates.
As mentioned above, working with your credit union can be very beneficial when it comes to auto financing. Your car dealership is likely to strongly encourage you to use their financing, and there's no reason to do so when you've already got a deal arranged with your credit union. Be polite but firm when your car dealer tries to arrange financing for you.
The down payment that you make does have an impact on your car loan. It can help get the loan for you by giving your lender confidence that the loan is a good risk and you’ll be able to repay it. In addition, a bigger down payment means you’ll have lower monthly payments. Ask your credit union to give you a couple of loan scenarios based on different down payment amounts to get an idea of how significant that impact could be.
When you're trying to find the optimal auto loan rates, it's important to give yourself plenty of time. Trying to secure the best financing on a car with just a day of notice isn't realistic in many cases -- but if you allow yourself a week or two you can be much more confident that you'll get the deal you want.
If you're looking for the very best rates, you'll need to be flexible. Often, the best rates may be available only on brand new cars while you'll pay more with used ones. Try to be at least a bit flexible when it comes to choosing a car for this reason.
While you might not want to pay a bigger monthly payment, there are some benefits that come with that. You might be able to get a lower rate this way, and you'll have the satisfaction of paying your car off much sooner.
America's Credit Union is here to help when you need a car loan. Use the loan calculator online or contact us anytime for help!
Related: Pitfalls They Don’t Mention About the Best Car Loans