When you're dealing with getting GMAC loans (a former captive-finance company of General Motors), one of your biggest weapons for low interest rates is irrelevant. That is, you can't just shop around lenders looking for the lowest rates. But your hands are not entirely tied when going through GMAC. Take advantage of the options below to try to lower those monthly payments or high interest amounts that you may be quoted initially.
- Try various participating GMAC dealers - one way to help bring down the costs of buying is to do the math for several vehicles at different dealerships. Various dealerships have their own dealer costs, and shopping around can work out in your favor.
- Amass a larger down payment - a great way to bring down financing costs is to throw down a big chunk of money up front at the outset of a loan process. This shows the lender that you are invested in a loan and not going to default (because you have your own money at stake). This always leads to lower total interest (because you are not borrowing as much), but it can also bring down your interest rates. Think about any assets you can sell, or any other way you can afford a larger down payment at deal time.
- Think about using secured auto loans to your advantage - consumers can often use either an owned vehicle or a piece of property to get better interest rates and loan terms with what is called a "secure loan," where your property is collateral for the loan. Ask lenders about this option for bringing down interest rates.
- Consider a cosigner - using a trusted friend or family member as a cosigner can bring down your interest rates. The lender uses this person's credit history as insurance that you will pay on your loan. But be careful with cosigning—sometimes, confusing paperwork issues can happen at the dealership. As a result, the cosigner sometimes becomes the prime borrower. Make sure this doesn't happen to you unintentionally.
- Work with your credit score - an individual's credit score determines what kind of interest rates they can get based on the risk assessment that lenders assigned to them. You can find out more about your own credit score using the FICO company, the business that oversees credit ratings, or at your local credit bureau.
The above tips will help car shoppers to figure out how they can bring down interest rates when they deal with the captive finance company for General Motors. The whole goal of GMAC is to get drivers into General Motors vehicles in the most efficient way. Try a few of these strategies to see if you can find better interest rates from GMAC that will keep you on the road for less money.