With the high price of gas, insurance and almost everything else, there is no reason for justifying why we should try our best to save where possible. Finding a low rate car loan is one place that you can save yourself lots of money. Many people are wondering where they can find better interest rate for their car loan and how to find these auto loans. If you fail to consider these options, you will pay much more for your car than you ought to. This article will give a quick rundown of where to find auto loans at lower interest rates even if you have bad credit.
Why Consumers Pay High Rates
Everyone knows that owning a car whether brand new or pre-owned is an expensive business as you not only have to pay for the car but also you have to pay for insurance, gas as well as regular maintenance to keep your car functioning properly. Therefore, there is no reason to increase your high expenses by taking out a car loan with high interest rate. Unfortunately that is the case with many car buyers. The reason that these buyers are paying high interest rates is because they either fail to consider all options or if they suffer from poor credit they believe that their only chance of getting a car loan is by paying through the nose.
Avoid Your Car Dealer’s Trap
Many individuals when shopping for a car fall for statements such as get your car and financing from the same place. It is unwise to get your financing from the auto dealer as auto dealers do not specialize in auto financing. They will contact an auto lender to finance the deal and in most cases in both US and Canada auto dealers increase your interest rate by adding an interest rate surcharge to the car loan.
This surcharge has even increase in the last few years as car dealers are trying to make up for lower sales volume due to poor economy. For this reason, the dealers have an incentive to get you to finance your car through them. Therefore you are guaranteed to pay higher interest rate if you are getting your loan through the dealer. It is best to cut the middle man and go to the source.
Where to Find Low Interest Car Loans
Your bank and credit union are good places to start. Just as with many other products and services, Internet is a great place to do your research and finding an auto loan is no different. There are many lenders that specialize in providing car loans and auto loans for bad credit. Whether you are buying a new car or a used vehicle you can get financing at much lower interest rates than going through the car dealer. Another advantage with online lenders is that online auto lenders have very competitive rates due to minimal overhead and upkeep.
Lastly, it is always to your advantage to arrange financing before heading to the dealership. The reason is that you know how much you have been qualified for; and secondly, you are in a position where you can better negotiate with the dealer since you can prove that you are a serious buyer and have the financing at hand.