Knowing the following five tips to a lower interest rate on your car loan can save you a lot of money on the total cost of the car. Although most of the lower interest rates you see advertised on television are basically marketing gimmicks, you can get a lower interest rate on your car if you prepare well. Learn what you should do to get the lowest interest rates on your next car purchase.
Purchase A Brand New Vehicle
The newer the car you buy, the better the interest rate you get. Brand new cars usually attract the lowest interest rates. While the interest rate can be lower on new cars compared to used ones, your total cost can be the same on a new vehicle and a used one.
Maintain A Good Credit Record
Nothing impacts interest rates like credit scores. Credit score determines your financial buying capacity in various areas, be it car loans, auto insurance rates or mortgages. The best credit score will get the lowest interest rates. Keep track of your credit record by checking it annually. Paying all your bills on time will have a positive impact on your credit score and so ensure you take care of your credit cards, car loans, mortgages and personal loans. If you get behind on any of these payments even by one month, your score will drop so many points. Another way to maintain a good credit score is to have more credit as compared to debt. For example, having a credit card with a USD 15,000 limit and only using USD 2000 of the credit gives you a better credit score as opposed to exhausting your credit.
Get A Co-Signer
Some lenders require you to have a co-signer in order to be eligible for auto loans. Meaning the lender will calculate the interest rate of your auto loan based upon the credit history of both you and the co-signer. A co-signer can not only determine whether you get an auto loan or not, but may also help you get lower interest rates. The better the credit score of your co-signer, the better chance you’ve of getting lower interest rates.
Shopping around plays an integral role in determining what interest rate you get. Car dealers, banks, credit unions and other lending institutions like http://Crazy88Auto.net can have different interest rates. You may be more comfortable taking a loan from your credit bank, but a car dealership may offer you an incredibly lower interest rate.
Opting For Short Loan Term Is Also Among The Top Five Tips To A Lower Interest Rate On Your Car Loan
Most lenders offer lower interest rates for shorter loan repayment terms. For example, you will get lower interest rates if you finance your loan car for 3 years instead of 4 years.
A lower interest rate may be within your reach as long as you are willing to fix lingering credit problems. If you use the aforementioned five tips to a lower interest rate on your car loan, you will certainly have a peace of mind when repaying your loan.