Skip to content

Credit Absolute

How to Get a Lower Interest Rate on Your Next Car

How to Get a Lower Interest Rate on Your Next Car

Whether you want to refinance your current loan for a newer car or get a good deal on your first car, getting approved for low APR financing saves you money. The world of Auto Financing is tricky and a good deal goes beyond bargaining on the sticker price.

Luckily, there are some approaches that can help you save thousands over the course of your car loan. To help you achieve this here is how to get a lower interest rate on your next car.

Getting a Low Car Loan Interest Rate

Start by Building Your Credit

Credit scores and loans go hand in hand. High scores attract low APRs while low scores get you high rates, and depending on how low yours are, you may end up not qualifying for the financing. To know where you stand, start by reviewing your credit report. This you can get from the major bureaus, at no cost once every year.

If the report gives your score at being below the “good” range, below 670 in the FICO model, then you need to hold your loan application and build up the score first. There is however no quick fixes when it comes to building credit. Here are some pointers:

Shop Around

Almost every bank and credit union offers auto financing. There also independent and direct renders such as CarsDirect and RoadLoans, who offer instant financing. The industry is however not standardized hence rates differ from a few to as much as ten percentage points.

Get the best deals by starting your shopping online. Compare rates and terms, and feel free to call and haggle for better rates.

Pro tip: To outdo a dealer or financier during negotiations is not an easy task. Start by approaching a lender for loan prequalification that is within your means. Use that document to get other lenders to lower their APR.    

Consider Refinancing

Refinancing involves having a new lender to offset your current loan for a new loan. This gives you the chance to haggle for lower rates and a shorter term. If done right, refinancing can see you save thousands of dollars, buy a new car from the surplus, pay off the loan quicker and settle for affordable monthly payments.

Pro tip: To get a sense of the advantages of refinancing or what to expect, check the facility through online calculators.

Go for Shorter Loan Terms

Low monthly payments are some of the inducements that lenders use to make you borrow more. Such payments are made possible by having the loan stretched over a long repayment period.

Long terms, however, translate to high interest on an aging car. When on the negotiating table ask for a short loan term and calculate the total interest due; don’t be blinded by low monthly payments.

Read before Signing

“The devil is in the details.” This is a saying that no lender will use in front of you. Reason being, it holds true on most financial and contractual agreements. Taking a loan is a huge commitment to your income and lifestyle. You should, therefore, be careful of what you sign.

It’s in the fine print that huge penalties and hidden charges can be hidden. It’s also possible for some good aspects of an oral agreement, such as low interest, to be voided in the legal jargon. With this mind, read the agreement and if possible have a lawyer friend assist you in understanding important points.

Do not Finance Add-ons

One crafty way dealers use to increase interest rates is by including add-ons on the car loan. These could come in terms of new rims, leather interiors, audio upgrades and so on.

When the dealer is explaining, add-ons will sound like “must-haves” with only a key detail missing- they will cost you far much more than they would if done in independent garages, after the sale.

The Takeaway

Getting low interest on a car loan requires due diligence on your part. It’s on you to ensure that your credit scores are above average. Learn about online platforms where you can compare, shop and negotiate loan particulars. Lastly, be ready to shop around and to bargain for better terms by arming yourself with everything you need to know; as outlined above.

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

« Previous Post

Will consolidating your debt help your credit score?

Next Post »

Life After Bankruptcy: 6 Steps to Bouncing Back

Request a Credit Audit & Receive Our Free E-Book

David Burgess
David Burgess
19:02 20 Aug 19
Derick and his team have been extremely helpful and informative throughout this entire process. I would recommend to anyone who wants/needs to repair credit quickly! Worth more than the money without question!
steve moore
steve moore
23:32 16 Aug 19
Derick and his team were awesome! I would highly recommend their services if you are looking to refurbish your credit score!!! +A all around for his team and the willingness to help me out !
Zacary Roberts
Zacary Roberts
03:00 26 Jul 19
Felicia helped me out so much, the company is professional l, but they treat you like your their only client. They are thorough and honest and my credit score has gone up remarkably ever since I started working with them. Thank you so much!
Chris Gunn
Chris Gunn
18:50 25 Jul 19
Good folks. Money well spent. Their service works! I finally got my credit straightened out to where I could buy a home because of them.
Christy Russell
Christy Russell
15:37 25 Jul 19
This company provides a great service! Friendly staff, plain-spoken, direct, no nonsense. They really make you feel like they care. Simple and straight-forward approach. They analyze your credit report and quickly make a plan to step-by-step repair any flags. I highly recommend their program.
Christian Wunder
Christian Wunder
19:35 18 Jul 19
They have been great to work with. Going on 3 months now and my score has taken a huge jump. I've had items removed from my credit and every month we go over our strategy to maximize the improvements. Highly recommend :)
Baron Adelmann
Baron Adelmann
21:59 26 Oct 17
Derick and his team have helped me tremendously! He explains the process of improving your credit and does all of the work for you! My credit score has improved drastically and I know that I couldn't have done it without the help of Credit Absolute. Because of them, my business has continued to thrive in a way I never thought possible. Thank you Derick and the Credit Absolute Team!
Gabriela Lovelace
Gabriela Lovelace
23:17 30 Jun 17
I want to thank the wonderful team of Credit Absolute for all the work they did in help me clean my credit! They have teach me how to keep my credit clean and how to make it grow! I will be their customer for life and I recommend to anyone who needs help with their credit! Credit Absolute you are awesome!!!!
Sho Sho Smith
Sho Sho Smith
22:31 16 Feb 17
Derek just made my day when I thought my credit was being compromised due to a balance on my late husband's credit card. He checked it out my credit health and assured me that I lost no points and the balance was forgiven. Great news! He gave me pointers on how to get my credit score even higher to put me into the premium level and coached me on getting back on my feet, credit-wise, after my husband's death. A great experience!
Vanity Hernandez
Vanity Hernandez
20:15 19 Jul 16
I was referred to Derick when my credit score dropped 3 points as I was in the process of trying to get a mortgage loan. Derick gave me GREAT advise and also helped confirm all the credit myths I have overheard on how to improve your credit score. Not only did he give me advise, he not once tried to have me hire him like others usually do. Derick was genuine and that's hard to come across with business. :)
Ian Farruggio
Ian Farruggio
19:29 05 Jul 16
Derek was completely professional and offered helpful suggestions to help me improve my credit. He was honest, in that his services were really not needed and helped to point me in the right direction free of charge. If you have any questions regarding your credit, this is the only place to go!!!
Next Reviews

Don't Leave Without Getting Your Free eBook