The economy is skidding to a halt lately, and so purchases have been restricted to a few necessities. Still, many people are taking this opportunity to purchase their cars because the government are giving out purchase incentives. The best and simplest way to get the lowest interest rates for your car loans is to go around asking for a quote from several dealerships, but before you embark on this loan-hunt, there are things you should consider first.
- Know your credit rating. One item of leverage you can use in negotiating for a low interest rate is by knowing your credit score. If your credit score is considerably favorable, you can negotiate for a lower interest rate given that you have a reputable credit rating. Be sure to get your credit rating before going to a dealership, not after.
- Secure financing. If you can get auto financing before going to the dealership for an auto loan, then get it. You gain significant ground in negotiating for a lower interest rate when you have sufficient cash on hand for the purchase.
- Read newspapers. Sometimes institutions offer very low interest rates and choose to advertise in newspapers. Collect samples of these advertisements so you can compare them later on. Sometimes you can also find advertisements for a mortgage loan or a personal loan, which can be helpful in the future.
- Collect flyers. When you go to the mall, many loan agencies hand out flyers for their auto loan promos. Try and get a few of these flyers to see which ones can offer you the lowest interest rate possible for your auto loan.
- Know the current prime interest rate. The federal government sets the prime interest rate, and it basically predicts the going interest rates across all financial institutions. The lower the prime interest rate, the more you can negotiate for a smaller interest rate with your dealership.
- Visit different banks. Banks also offer car loans for those needing financial help with purchasing their cars. Visit several banks to know their going rates for auto loan, and find out how you can achieve the lowest interest rates possible. Sometimes banks also offer loan calculator services to explain the details of your payments.
- Look for independent lenders. There are independent lenders out there whose sole purpose is to give out car loans to prospective car buyers. Try and look for these establishments, because sometimes they give the best value for your loans.
Make sure to use convincing and persuasive words to negotiate for a lower interest rate for your car loan. But remember not to be pushy, because you may end up turning off the lender. Also make sure to settle credit problems before going into a deal, otherwise you may just end up with a higher interest rate. Still, one of the best methods to purchase your car without doling out a lot of cash is to save up for it and pay from your funds.