Auto Financing
Find the lowest finance rates using the internet

If you plan to finance your new car purchase you need to shop around to find the best deals. Compare the car dealer financing rates with banks, credit unions, and other loan institutions first. As interest rates vary it’s best to shop around first to find the best financing deals. On certain car models there may be special manufacture incentive like low interest loan rates, however these deals may require a larger down payment.

Try to keep the length of the loan as short as possible. A three-year loan with the same rate of interest costs you less overall than a four or five year loan. While you need to keep the payment within your budget each month, you also need to look at your total cost. Consider getting pre-approval for a loan once you have chosen your lending agency. Some agencies will issue you a check "not to exceed" your pre-approved amount, allowing you to use the check like cash when you go car shopping.

You can apply for a car loan from a variety of sources: banks, credit unions, online direct lenders, loan brokers, and auto finance companies. Auto Manufacturer also offer dealer financing on selected car models. Often auto dealers advertise special loan rates, some as low as 0%, however, only people with perfect credit can qualify for zero percent financing.

The time you can take to pay back a car loan also varies. Usually you can choose from 36 months (three years), 48 months (four years) or 60 months (five years). You can lower your monthly payments by taking a longer loan period. However, the longer the loan period the higher the total interest you will pay over the life of the loan.

Interest rates for loans for people with average credit can be up to 60% higher than the rates available to people with excellent credit. People with poor credit may have to pay an interest rate two to four times higher. If you are seeking financing for a new or used car, you have many options for financing even if you have a poor financial history. However, late payments and other credit problems signal lenders that you are a risky customer, which will increase the interest rates on loans available to you. There are differences between lenders, so find the best deal by shopping around.

Knowing your credit
Your credit history is the main determining factor in what type of auto loan you will be approved for and the interest rate that will apply. If you have a poor credit rating, you will normally have to pay a higher interest rate (APR) to finance your car loan.

It is always advisable to order a copy of your credit report before you go shopping for a car loan. Errors on credit reports can be common and by checking your report ahead of time, you’ll be able to contest any inaccurate information.

When buying a new or used car, always be prepared before you visit the car dealer. By having a copy of your credit history in hand, you’ll be prepared to deal with any auto dealers who may claim you have bad credit in order to justify a higher interest rate.