How to Get the Best Auto Loan Rate

Even though the car buying process can be stressful, there’s nothing more exciting than driving off the lot in the vehicle you’ve been dreaming of.

But before that can happen, there’s a good chance that you need to secure an auto loan.

On the plus side, there are hundreds upon hundreds of lenders that offer auto loans to consumers with all types of credit.

Conversely, just because there are options available to you, there’s no guarantee that you’ll make the right decision. It takes some time and knowledge to ensure yourself of that.

Here are the steps you can take to get the best auto loan rate:

1. Check Your Credit Report and Score

Before you do anything, request a free copy of your credit report and score. Review it closely for accuracy and to better understand your current financial situation.

If everything looks good on your report and you have an excellent credit score, you’re in good shape to move forward. However, if you spot an error and/or your score needs some improving, you may want to put off the buying process for the time being.

2. Talk to the Dealer’s Finance Department

Even though you need to be careful about this approach, it’s a good place to start.

Your dealer’s finance department has relationships with many lenders, local and national. They can work with them to secure you the lowest possible rate.


But there’s something to keep an eye on. The finance department may bump the rate higher than what you actually qualify for, as it allows them to earn extra money on the deal. You don’t want to fall prey to this tactic.

3. Shop on Your Own

While the finance department is working on your behalf, you should do your homework.

Do the following:

  • Contact your local bank to ask about current auto loan rates
  • Search online to compile a list of 5 to 10 lenders you want to consider
  • Reach out to each lender for a rate quote

When you do these three things, everything will begin to come together. You’ll begin to see which lender can offer you the best rate.

4. Lock in the Rate

Once you find a lender, ask them what you need to do to lock in the rate. This is particularly important if you aren’t making the purchase on the spot, but will instead be waiting a few days or weeks.

Every lender has a different process of locking in rates, with some not offering this at all.

Final Thoughts

When you take these steps, you position yourself to get the best auto loan rate. And when you do that, you can save hundreds or even thousands of dollars over the life of your loan.

Don’t give up on your search until you find a lender and loan that meets your every need. 

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