How to Lower Car Interest Rates

Most people want to lower their monthly expenses and increase their disposable income. If you have a car loan, reducing your interest rate can result in a lower monthly payment. Hence, you'll have cash to put into savings or pay down debts. Some car buyers obtain a higher rate due to no credit history or poor credit. However, there are ways to obtain a reduced rate.

Instructions

1

Obtain a copy of your credit report. Low interest rates are reserved for people with a good credit history. Request a copy of your credit report from one of the three major bureaus, or order an online copy from Annual Credit Report.

2

Improve your FICO score. Individuals with acceptable credit are candidates for a low interest rate. If you have a low score, take steps to boost your score. Pay your bills on time, reduce your debts and limit credit inquiries. Paying off judgment and collection accounts can also raise a low score.

3

Refinance your auto loan. To lower your car interest rate, contact your current auto lender (or select a new lender), and inquire about a refinance. A refinance creates a new auto loan, in which the new loan pays off the old one.

4

Compare auto loan rates. Request auto loan quotes from at least three lenders. Comparing quotes is the only way to obtain the lowest rate and best loan term. Quotes feature an estimated interest rate, loan term and monthly payment.

5

Choose the best auto loan. After reviewing the auto lender quotes, pick the quote that features the lowest car interest rate. Make an appointment with the lender to sign the new loan documents.