3 Steps to Your Best Deal on a Car Loan
Understanding what our finance department looks at and how those factors affect your loan's interest rate is a great step towards positioning yourself to get the best deal possible on a car loan. Here are some of the most critical factors lenders look at when deciding the terms of your auto loan.
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Your Credit Score
Credit scores are still the gold standard for making lending decisions and a higher credit score usually means a lower interest rate. There are several options to check your credit score online. Knowing what your score is in advance can allow you to improve if it isn't as high as you would like it to be.
The next important factor to look at is how much you already owe, including existing automobile loans, mortgage balances, credit card debt, and so on. High levels of existing debt could be a red flag for lenders writing auto loans.
If can pay down your existing debt, you can vastly improve your odds of getting better terms on your vehicle loan. One trick for tackling debt is to pay down an overall percentage. For instance, if you have two credit cards with a balance of $3000 each, rather than paying off one credit card, it is better to pay off $1500 on each. That shows you have credit available and that you are not maxed out on your cards.
Maximize Your Trade
Financing less money may help you better qualify for a better rate. One way to reduce the amount financed is to trade in your vehicle and apply that value toward your new vehicle purchase. With people holding onto their vehicles longer, we are always looking for great pre-owned vehicles for our inventory so your trade may be worth more than you expect.
The whole process of getting pre-approved for a car loan has been streamlined over the last few years. In fact, you can begin the process online from the comfort of your home. And even better, current incentives are available with some of the best financing terms we've ever been able to offer.
For more information on how we can help you with the purchase of your next vehicle, please give us a call at (307) 237-3700.