Excessive Auto Loan Interest Rates: Avoid Getting Ripped Off

Auto loan interest rates can vary a great deal. While there are good reasons for auto loan interest rates to be high, it doesn’t mean you need to get ripped off. Here’s how to avoid getting gouged.

Don’t Accept the First Auto Loan Deal

When you’re in the market for a new car it can be exciting and it’s common to forget to take the time to compare auto loan interest rates. Lenders are in it to make money and so you should obtain several quotes from different lenders to ensure you don’t pay excessive auto loan interest rates.

Improve Your Credit Score

Those who have a poor credit score are much more likely to be gouged with excessive auto loan interest rates. If you can wait to buy a vehicle just a little longer, it will give you some time to build your credit score up and establish a positive credit history.

With a little discipline and determination you can actually improve your credit score in as little as 6 months. Start by making sure all your bills are paid on time, never skip a payment, and attempt to reduce your debt.

Get a Co-Signer for Your Car Loan

A co-signer can be very advantageous in obtaining good auto loan interest rates. That’s because the co-signer’s good credit score is reflected in the rates. Don’t be surprised if someone says no to being a co-signer since they are liable for your debt should you not make the payments.

Shop Online

If you want to find the best auto loan interest rates then shop for financing online. The Internet allows you to easily compare rates and be assured you are getting the best auto loan interest rates possible.

Read the Fine Print

That auto loan that looks so appealing just might be, but you should always take a minute to read the fine print because many times there are nasty surprises hidden deep within the fine print. For example, 4% for the first 6 months and then the interest rate jumps to 21%.

Up Your Down Payment

If you increase your down payment you are in a better position to negotiate a lower interest rate. By putting 20% down you can qualify for a much better interest rate, even if your credit isn’t perfect.

Don’t Be Afraid to Negotiate

If you want to find the best auto loan interest rates and terms, you have to be willing to negotiate based on your financial situation. Find the best interest rate and term combination. Don’t shorten the term to save a percent if making payments is going to become a problem, but do shorten it if you can handle the payment and save some money.

Auto loan interest rates will vary but it doesn’t mean you should accept rates that are excessively high. These strategies will help you find the best auto loan interest rates around.

 


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