Tips for Finding Competitive Car Loan Rates

Searching for car loan rates can seem like a hassle. But there are some simple things you can do to make the banks work for your business. Keeping these simple things in mind can work to your advantage. Here's how.

Using sources online such as Lending Tree will offer you several different rate comparisons. With tools like this you only have to submit the information one time and the banks will contact you. The lenders know they are competing for your business this way and the rates tend to be more competitive.

If you get a great quote from one lender, get it in writing. This way when you shop for other rates you can show the lenders that you have this rate that they need to beat to gain your business. You will find that most lenders will at least try to match the rate, and some can offer you a better rate.

If you are looking for a lower monthly payment, you may want to consider financing your loan for a longer term. A 60 month term will translate into lower monthly payments. A lot of lenders won't allow you to finance for this long, but this is something else to keep in mind when you are looking for great rates.

Being armed with critical information like what your credit score is will help you get a better rate, and you can use this information when you are shopping around. A higher credit score means better rates. If the banks know that you are shopping around for good rates, they are more likely to lower the rates for you as long as your credit score is high enough. If your score isn't that great, then you can take some time to clean up your credit before you purchase a car.

The kind of car you want to finance will have a lot to do with the terms and the rate. A high end sports utility vehicle will generally have a higher rate and higher payments than a small sedan. You can always refinance a higher end vehicle after a year or two if you weren't able to get the best rate in the beginning.

Lenders look at a down payment as a type of guarantee for the loan amount. The higher a down payment you are willing to make, the lower the lender's risk will be. They see that you are less likely to default on a car loan that you have made a large initial investment in. Often times this can help to give you a lower finance rate as well. Be sure you know what you can afford, and use this information to your advantage when you are shopping for auto loans.