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How To Drive Away With A Low Auto Loan Interest Rate
By EchoBay Loans Staff Writer

When it comes time to buy a new car, your auto loan interest rate can have a tremendous impact on your payment and what you pay for the car overall. A difference in a few points on the interest rate can add up to thousands of dollars over the life of the loan. But it is possible to drive away from the dealer with a low car loan interest rate. Follow these tips to come away with the lowest rate.

Use the competition between lenders to your advantage
By shopping rates between lenders or car dealers, you increase your likelihood of walking away with a low rate.
When lenders know you are shopping for the best deal, they are more likely to offer you the best rate upfront to seal the deal. Of course, the easiest way to shop rates and find the lowest auto loan interest rate is to log on to the Internet. There are hundreds of online lenders and applications can be completed and approved within a matter of minutes. By having a pre-approved loan, you can also have a greater chance of negotiating the price of the car when you visit your auto dealership.

Choose a car not in demand or wait it out
A low auto loan interest rate is typically offered on the cars that are not in high demand. If you are after the "hot" car of the month, you can expect to pay a higher interest rate. For some cars, it may simply mean waiting a few months. For example, if you are dreaming of a convertible, your best bet is to buy in the winter months when the car will not be in high demand. If you pull onto the dealer's lot in May looking for a convertible, you can expect to pay top dollar for the car and your loan.

Shop for the previous year's model when new models are coming out
The new models for the upcoming year can start arriving at the dealership as early as late summer. Most new models are available in early to late fall. This can be the best time to shop for a new car and to get a low auto loan interest rate as long as you are looking for the model that is on it's way out. Dealers are anxious to clear their lot of the current year's cars to make room for the new models that are on their way. Many dealers will offer incentives on the price of the car as well as the interest rate to help move these vehicles off their lot.

Keep your excellent credit rating in tact
The better your credit rating is, the more likely you are to secure a low car loan interest rate. The interest rate will depend largely on your credit history. This is one of your most important assets in the financial world and you should do what it takes to keep your credit rating in tact. Always make your payments on time and if you are going to be late, contact your creditors ahead of time rather than making them call you. They will be much more understanding.

It is also important to do a periodic check of your credit to be sure everything reported is accurate. It is easy for mistakes to appear on your credit report but no one else is going to check them for you. You can request a free copy of your credit report and should do this each year. If you find errors, report them immediately so your credit report can be corrected.

Take advantage of the interest rate wars between manufacturers
Many times, once one manufacturer begins to offer 0% financing or a low interest rate, other manufacturers will follow suit. When this happens, this can be an excellent time to buy a car and take advantage of low auto loan interest rates. Be aware that these rates are generally only offered to those with excellent credit and the loan terms can be shorter than traditional financing. But it is a way to walk away with a great deal from your dealer!

Don't be afraid to negotiate the rate
With the exception of special rates offered by the manufacturers, it is possible to negotiate the interest rate on your auto loan just as you would the price of the vehicle. Do not be afraid to include the interest rate in your negotiations. Even a small difference in interest rates can save you hundreds if not thousands of dollars over the life of the loan.


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