Buying a car can be a time-consuming process, and by the time you’re almost finished, dealing with the dealer’s finance department or a lender may feel like a necessary evil. However, if you are not careful, you may end up paying more for a car loan than you need to.
While there are some restrictions, it is possible to negotiate car loan terms with lenders and dealers. Here are a few things you can do to save hundreds or even thousands of dollars.
How can I get the best interest rate?
When it comes to qualifying for lower interest rates, your credit score is crucial. That is why it is critical to understand exactly what it is before applying for a loan. The higher your credit score, the more likely you are to qualify for a lower interest rate.
Whatever your dream car is, the larger your down payment, the lower your interest rate. At the very least, you should try to put down at least 20%. Furthermore, the general rule of thumb is that for every $1,000 you put down, your monthly payment will be reduced by approximately $18.
When it comes to buying a car, timing is everything. If possible, shop in the later months of October, November, or December. Also, look later in the month and earlier in the week, as these are the times when salespeople are under pressure to meet quotas and are thus more likely to negotiate down to lower prices.
Fees and taxes
Taxes and fees are among the things that are frequently overlooked until the end of the car-buying process. If possible, account for these at the start of the process and pay them off in cash. It may appear to be a minor point, but it can save you hundreds of dollars over the life of your loan.
Refinancing your existing car loan can save you money in a variety of situations. Your credit may have improved, or you may simply want to reduce your monthly payments. Whatever your circumstances are, refinancing may be the quickest path to a lower interest rate.