How to Get a Good Interest Rate on a Car

Buying a car may require financing from your bank. Banks compete for car loans and strive to provide good interest rates for qualified applicants. Loans that are secured by a car provide the lender with collateral until the loan is paid in full. Most lenders offer car loans that range from two to six years. A car loan provides you with a method of obtaining financing over time for the vehicle that you want now. You can get a good interest rate on a car if you have stable income, excellent credit and timely payments on previous auto loans.

Instructions

1

Review your credit data online. Obtain your credit score, as well as a copy of your credit report. Visit websites such as Annual Credit Report and myFico to get your credit report. Dispute any incorrect items with the reporting credit bureau.

2

Check the interest rates for a car loan at financial institutions where you currently have a banking relationship. Inquire about interest rates from your bank, credit union or credit card company.

3

Use your membership from organizations such as AAA, Sam's Club, Costco's or BJ's Wholesale Club to find good interest rates for car loans. Contact your member services department to gather details about member's only specials on auto financing.

4

Speak with the finance manager at a car dealership. Share a copy of your credit report and mention some of interest rates that were offered to you for car loans. Compare dealer incentives and the interest rates offered by car manufacturer's against your research to determine your best deal.

5

Apply for a two- or three-year term. Select the most affordable term for your car loan, while considering most banks and auto lenders provide lower interest rates for shorter terms. Choose a four-year term instead of a five-year to term to get a better interest rate on your car loan.