Negotiating the Lowest Used Car Loan

Purchasing a car doesn't have to be a challenge. If you properly prepare by honing your negotiating skills, you can get a great deal and pay the lowest used car loan rate. Start with the mindset that no one ever pays the asking price.

Controlling the Negotiations

Once you locate a used car, talk to your lender. This is a step that you should do before executing any contracts with car dealer. Do your research and be aware of the interest rates in your area. If you are considering a dealer financed option, watch out for the loan add-ons. For example, credit life insurance and the extended warranty. The dealer may present an enticing low interest rate and attempt to make up commissions on the back end. Being aware of this tactic will ensure that you receive the lowest used car loan possible. Be firm and negotiate the price of the vehicle and the loan rate first. If you take these steps you'll stay in control of the negotiations and have vehicle price and loan rate that you are comfortable with.

Another key step in getting the lowest used car loan is to offer a decent down payment. Use this to your advantage in your negotiations. You can force their hand on lowering the price of the used car and the interest rate. Overall, in today's market, with good credit, good used car interest rates range between 5-6.5%. If you work hard enough, you may even be able to persuade a lender to grant your used car loan at 4.5%.

 


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