When speaking about auto loan rates; what you are speaking about is the amount of interest you are paying on your automobile loan. The better auto loan rate you have it will better your car payment will be on a monthly basis. The best advice that can be given is to compare auto loan rates with many different lenders and try to obtain the best rate available. This article will help to explain an auto loan to you and give you some tips when trying to negotiate your loan interest rate.
Types Of Auto Loan Rates
Before getting into the ins and outs of an auto loan negotiation you should know that there are four different types of auto loan rates. These are a 36-month loan, a 48-month loan, a 60-month loan and a 72-month loan. These types of loans will all have a different interest rate attached to them. A general rule to remember is that the lower the number of months in a loan the lower the interest rate will be. Of course there are other things to factor when considering an interest rate such as a new or used car and the area you are shopping in but the number of months is one of the primary factors in figuring the interest rate.
Negotiating An Auto Loan Rates
When you are purchasing a new or a used car the first thing you will want to consider is negotiating your auto loan interest rate. Often times car buyers do not think that the interest rates can be negotiated. It is true that interest rates on car loans are fixed but there are certain criteria that you can meet to make you eligible for a much lower interest rate.
If you are a borrower who has very good credit you should be able to obtain a good interest rate when it comes to purchasing a car. Usually when you have a good credit score you will find that the interest rate on your car loan with bad credit will be very low. Generally the higher your credit score the lower your interest rate.
Another tip to a low interest rate is to purchase a car at the end of the month. You might be asking yourself why this is. It is because the sales person at the car dealers has a certain amount of sales to meet every month. When it comes close to the end of the month they are working on increasing their numbers therefore they are willing to argue less with the cost of the car to make the sale.
The last tip and most popular tip is to is to increase the amount of your down payment. The more the down payment is the lower your interest rate will be and it will also show the lender that you are a serious buyer.
Whether you are purchasing a new car or a used car you do have a little bit of a say in how much interest you are paying on your car loan. You can start with researching and comparing the different interest rates from each lender. This will help you to find the best interest rate available for your financial situation.