How to Get the Best Auto Loan Rate
If you’re in the market for a new car, one of the first things you’ll look at is an auto loan. However, this is no easy task. Between work, making dinner for the kids and walking the dog, it’s hard to find time to compare offers and find the best auto loan rate.
If you’re not a finance expert, don’t worry. We’re going to break down all the factors that create a great interest rate and how to find the best deal.
What Is a Good Auto Loan Rate?
Ideally, you want the lowest annual percentage rate (APR) over the shortest amount of time. That way you can pay as little interest as possible.
Auto loan rates can fluctuate, but you can still prepare yourself for what to expect. The latest report by Experian’s State of the Automotive Finance Market shows auto loan rates by credit score for the third quarter of 2022:
|Credit Score||Avg APR New Cars||Avg APR Used Cars|
Knowing the averages will help you look for a matching or lower rate when you check out different lenders and their offers. If a lender’s offer is way above your corresponding credit score, then steer clear and find a lower rate elsewhere.
How Do I Get the Lowest Auto Loan Rate?
Several factors impact your interest rate, including:
- Your credit score
- Your area of residence
- The type of car you’re purchasing
- Your annual income
- The type of loan
- The loan amount
- Your down payment
Let’s investigate how to get the best interest rate possible.
Your Credit Score
See where you’re at with your credit score by getting a free credit report from Annual Credit Report. If you have below a 760, you may want to take some time to boost your score. Pay down outstanding credit card bills, correct any errors and make payments on time.
Shop Around and Get Pre Approved
Fill out applications at local banks and credit unions to maximize your offers, but do it within two weeks. When you apply for an auto loan, your credit score takes a small hit. Do your applications within two weeks instead of several to make a significantly smaller dent.
When you start getting offers, use the car budget calculator to figure out the total interest you’ll pay during the lifetime of the loan.
Save Up and Know Your Budget
One of the best things you can do is save up for a down payment. This will decrease your auto loan amount, your interest rate and the amount of interest you’ll pay over time.
Remember, you don’t have to take out the entirety of the loan. Factor in additional expenses like taxes and registration fees, and make sure the payments don’t go beyond what you can afford.
Find Out Your Auto Loan Rate and Get Pre Approved Today!
UTF cares about our community and customers. We’re here to help you get the lowest APR on your auto loan so you can finally get your vehicle. Fill out an application or give us a call at 866-462-5532 to share your story and discuss your options.