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When you think of getting a good deal on a car you probably think of price or rebates, right? Well, when you buy your next car, keep in mind the forgotten key to finding the right car: the auto loan. The auto loan is not often thought about in the purchase of a new vehicle. In fact, many dealers try to keep you from worrying about the auto loan and try to focus primarily on payment. Never forget that your payment is based directly on your auto loan. It is pertinent that you find the right loan on your next car. In order to do that, focus on two things: interest rate and term.
Interest rate charged on Loan You want to find the lowest interest rate for the term that best suits your needs on your next auto loan. Shop around to get a good idea on the rate you can qualify for on the term you want. If you wait until you get to the dealership to find financing, you may find yourself being gouged. Sometimes the dealer won’t even talk about interest rate unless you force them into it. On the other hand, if you see special interest rates being offered at the dealership, see if you qualify. Sometimes the best rates on an auto loan can be found at the dealership and not anywhere else. Bring your alternative financing options with you in case you don’t qualify for the special financing.
Term of Auto Loan You can usually get a better rate on an auto loan for shorter terms. A 36 month term is almost guaranteed to have a better interest rate than a 70 month term. Keep this in mind, especially if you are able to get 3% financing for 36 months, but it jumps up to say, 10% on a 70 month term. You could save a ton of money in interest by going with the shorter term.