Getting a low auto loan rate is the key to paying less on your auto over time. The higher your rate is, the more money you will pay in additional money known as interest, on top of your principal loan balance. There are certain things that you can do to try and ensure that you receive the lowest auto loan rate available to you.
Look at your credit report
A lender will look at your credit report before they give you an auto loan. What they see on your report will help them to decide if they should give you a low auto loan rate, or a higher rate. Since the lender will look at your credit report, you should at it too. You can sign up to see your credit report for free through sites like Credit Expert by Experian. Check all three of your reports if possible, as the lender may look at any one of them or all of them before choosing your auto loan rate.
Get rates from several banks
Each lender will have their own set of criteria for who gets low auto loan rates and who gets higher rates. While one lender may give you a higher rate, another lender may give you a lower rate. This is why it is important to get rates from several banks to see who will give you the best rate before taking out an auto financing loan. The differences in bank lending are due to each bank checking a different credit report and each bank having their own standard for what rates they are willing to give.
Apply for a loan at your own bank
Some banks may give better rates to their own customers. Apply at your bank first to see what type of auto loan rate they are willing to offer you. After that, you can get other offers and compare them to the auto loan rate offer that you received from your bank. Once you have all of your auto loan quotes, you may find that your bank gave you the best rate overall. If you are a home owner and have your mortgage loan through your bank, this may give them another reason to offer you a low auto loan rate.