Obtaining auto financing to get your new car can be a fun experience. However, you need to be aware of a few things before you make a final decision on which rate will be the best for you. Of course, the dealer’s rate may look attractive, but there are many things to consider as you search around for the best auto loan rates in Columbus, Ohio, such as those we have listed below.
The Greatest Rate Is Not Always From the Dealer
A lot of times, the dealer has a rate that is not always the most beneficial when it comes to a new car. In fact, the rate from your dealer will be average or even may be bumped up a bit so they are able to obtain a bigger piece of the pie. Sure, making a profit is nice, but you as the customer may want to choose other options as far as the rate is concerned.
Consider the Entire Amount of the Loan
When shopping for a good rate, you need to consider the entire amount of the loan and not the payment amounts. Monthly payment amounts need only be discussed after you decide on the amount you wish to pay. You don’t need to negotiate any payment.
Be aware that a lender may try to trick you into borrowing more than you need by talking about what your auto payment may be. This is done by adding more months to pay your total amount. This will allow the financer to collect a higher amount of interest while making you drive longer than necessary. However, you need to keep on your toes so that your borrowed amount does not change.
Search the Different Rates
Searching online can allow you to make a decision based on what you want and what is available and then consider the best rate. You can also be free to calculate the best rate for you and then decide on the best financing available. If you come across lender reviews, make sure to take those into consideration as you shop around.
While searching online, it is a good idea to be aware of the loan terms, the interest rates, the down payment, and any late fees that you may incur. Check out as many lenders as you can through different sources such as the Better Business Bureau. That way you will know for certain that you can trust the financer.
Ensure Your Credit Is On Point
You need to know what your own credit score is before you can do any search for great rates. Your credit will have a huge impact on the rate of interest you obtain. The interest rate will always be a determining factor so when your credit is high, your interest will be a lower rate.
Many options exist for you to review your own credit score and history as well as obtaining a free copy of your report from all three credit bureaus (Equifax, TransUnion, or Experian). You can also make a request from the lender or your bank without having much effect on your credit score. You can also access your credit through CreditKarma.com for free.
The lender will determine the required credit score you must have in order to obtain the best interest rate. Normally though, the minimum score to obtain a good rate needs to be around 630 or more and at least 690 or higher in order to get what you really want. If you feel your credit needs improvement, you will need to start now prior to making a trip to the bank or lender. You can accomplish this by paying off other debts, paying on time, and limiting the number of credit accounts you have open.
Get Pre-Approval From a Financial Institute
It is always a good idea to get pre-approved by a lender before you visit a dealership. This way you already have the rate of interest you want and you only need to pick a vehicle and then negotiate the monthly payment. However, be aware of the rate your bank offers for auto loans because the rate may be higher than the dealer’s rate. This may be true especially if the dealer is offering interest rate incentives in order for the dealership to maintain an attractive price.
Oftentimes, what a bank offers may be even better than what the dealer will be providing. This will allow a lot of money to be saved on your part as well as for as long as you continue to be paying the loan. Of course, it means you need to go out of your way to get what you want but it will be worth it once you drive the car off the lot once the check is cut and delivered to the dealership.
Looking for the best rate around is not a difficult task to undertake. By shopping around and comparing the best rate you will be able to save the most money which is what a low rate will enable you to do.
When an Interest Rate Is at Its Lowest
Shopping around for a great interest rate is always a good idea regardless of the situation you are in. Sure, your credit may get dinged but it is a small price to pay when you want the best rate for the long term. Saving thousands of dollars sounds good for anyone when there is more to benefit.
Sometimes an interest rate will not be able to go any lower due to it being offered by a manufacturer who is making the offer. An example of this is when the interest is three percent or less. In this case, it may be better to skip the shopping since no one else will be willing to provide the same interest. Plus, you may miss out on the same great offer if you decide to take time to shop around.