6 Things You Don't Know About Finding the Best Car Loan Rates
While the average rate for new car loans is around 4.51% in 2018, that number is always changing. Of course, the amount that you pay in interest depends on several factors individual to you and your situation. Here are 6 things you don't know about finding the best car loan rates.
- How They Affect Your Credit Report
If you're at a car dealership and their finance department runs your credit, it's likely that they'll check with more than one lender. They could potentially check many lenders -- maybe even up to 10 or more. Normally, this would have a negative impact on your credit report. However, if you have several inquiries all related to one potential purchase, the credit reporting agencies count it as a single inquiry.
- Your Credit Score Influences the Rate You Get
The car loan rate that you qualify for is tied to your credit score (the higher the score, the lower the rate). Always strive to protect your credit and work to improve it if needed.
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- It Can Take Time
If you're determined to find the best possible loan rate, you need to know that it can take some time. Plan to allow at least a week -- more if possible -- to scout out all loan possibilities before you make a final decision.
- The Lender Really Matters
While getting a great loan rate is important, it's not the only thing to think about. You also need a good lender who will be helpful and trustworthy in the future. When a lender offers you a great rate, do a bit of research on them to make sure that they're the kind of company that you want to do business with for the years to come.
- Pre-Established Relationships Can Be Very Valuable
If you're already a member of a credit union, that relationship can turn out to be very valuable when it comes to securing a loan at a good rate. Your credit union already has a history of working with you on other financial products like checking accounts, savings accounts, money market accounts, credit cards, or other products. This history helps them get a good idea of your reliability and it may help you get the low loan rate that you want.
- Having Your Documentation Ready Speeds the Process
When you're applying for a new car loan, take along the important documentation. You'll need your driver's license, recent paystubs, proof of address, and proof of auto insurance. Having these things on hand can mean you're much closer to your best car loan rates!