How to Get The Best Car Loan

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By 07hopekee
User-Submitted Article

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Find The Best Loan!

Time to buy a car! Car loans are cheap; but only if you have good credit. Those who have poor credit are going to pay more. Here is how you can get the best car loan.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

Ready to buy a car
Finances in order
Pre-approved loan

Step 1

Have a Down Payment

Check your finances and figure out what you can REALLY afford, because no car is worth going broke over. Do not finance a car for more than four years and you should try putting 20 percent down so you have equity in the vehicle. And stay away from payments that are more than 10 percent of your income.
Step 2

Check Current Incentives

You need to do your homework. Research current incentives (low-rate financing, cash-back, or lease deals) by using resources such as edmunds.com, car.com and Consumer Reports. And although dealerships are offering great deals on leases right now, keeping your car for 10 years or more makes the most financial sense.
Step 3

Get Approved

Find the best rate and get approved elsewhere. Check with banks, credit unions, and online sites such as E-Loan. All because you apply for the loan doesn't mean you have to take the money; however it does lock in a rate that you can present the dealership with when you're making your purchase.
Step 4

Challenge the Dealership

Challenge the dealership to beat the rate. Be sure you negotiate all aspects of the deal first (including price of the car and the value of your trade-in if you have one.) THEN you show your lender's rate and ask the dealership to do better. Dealerships often have access to slightly better wholesale rates that could drop the rate by a quarter of a percentage point. At that point you can decide if you want to take the dealership's rate or your lender's rate.