See current new car interest rates on select vehicles. Calculate monthly payments and find what works for your budget. Find and shop lenders who will provide you your best car financing deals.
You pored over details like trim, wheels, color, leather versus cloth, for your new car, so why would give your car loan any less attention? Shop around for an auto loan the same way you would for the car itself.
The number of websites and phone apps you could use to shop around for cars and car loans can be overwhelming — we broke them down by category, whether you prefer a new or used car, or need to buy a car following a bankruptcy. Don’t simply go to the closest local dealership and get the first car you see with the first loan the dealer offers.
If you’re particularly brand loyal, maybe you know exactly which car manufacturer you prefer — select it from the list above to see if you qualify for any available incentives or financing deals. But even if manufacturer financing is a good fit for you, it’s always a good idea to compare offers with your bank, credit union or online lender.
Once you’ve settled on a car, pay attention to the dollar amount, not the monthly payment or even the APR. Why? Because even a small increase in the monthly payment means a large increase in the total amount you pay. Auto loan calculators can help you figure things out.
Focus on the car price. It’s worth repeating, because car dealers love it when a customer only looks at the monthly payment. They know they can probably talk you into increasing your payment — what’s an extra $10 a month? A lot when you’ve agreed to a 72-month auto loan, at least $1,000 more in total. So focus on the car price, not the car payment, and negotiate the price down.
Focus on trade-in price, not the monthly payment. Same goes for the conversation about your trade-in vehicle. Car dealers love to say they will “give you” a certain amount for your trade-in. They are not giving you anything; they are buying your trade-in from you and you shouldn’t accept less money for it than it is worth. Again, pay attention to this value and don’t simply accept what the dealer says they will “give you” or forget that the value of your trade is a vital part of the car deal and your money. Research your car’s value ahead of time using tools like Kelley Blue Book, NADAguides or Edmunds.
Low or zero APRs versus cash rebates. A lot of people take pride in receiving a low APR offer. But a 1% APR difference on a $30,000 car is $300, and many rebates are at least $500. If you have to choose between a rebate and a low APR financing deal, the rebate is almost always better.
Watch out for long loan terms. Paying attention to how much in interest you will pay over the years of the loan as a dollar amount instead of a percentage will help you compare apples to apples when you’re looking at different auto loans with different APRs and different lengths. This can ultimately help save you money.
Businesses want you to buy from them — use this to your advantage.
Car prices. If Dealer A has a higher price than Dealer B, ask Dealer A to beat Dealer B’s price. You could go back and forth this way between multiple dealerships or sellers until you get the lowest price you can.
Trade-in value. You shouldn’t accept less than what your trade-in is worth, and the dealer is not your only option. You could also try to sell your vehicle online through sites such as AutoTrader, Craigslist, Facebook Marketplace and more.
Loan APR. It does not hurt your credit to apply to multiple lenders any more than it does to apply to one, as long as you do so within a window of about 14 to 45 days. So apply to more than one lender directly, not through the dealership. Dealers add an average of 2.47% to customers’ APR. The best way to avoid this and pay the least in interest is to shop around for a loan. When you have the loan offer that suits you best, you could go to the dealer with your preapproved loan(s) and ask them to beat the lowest rate.
At the end of this whole process, don’t forget to read what you’re about to sign. Make sure the numbers on the final contract match the agreed terms. The car price should be the same, the trade-in value should be the same, the APR and loan term should be the same. Don’t be afraid to ask questions, and don’t sign anything if the numbers are wrong. Make sure the numbers are right before signing.