Interest Rates For Used Cars-Shop Around by michaels.henry.koyu

VIEWS: 9 PAGES: 2

More Info
									                           Interest Rates For Used Cars-Shop Around



If you are in the market to buy a car you will find that the average interest rates for used cars
can be very different depending on your credit score, geographic location and price you are
paying for the car. Different lenders will also offer different rates. With all of these factors
coming into play when you need a loan, it pays to shop around and talk to several lenders
before making your decision when looking for the best auto loan deal.

If you have a high credit score you will qualify for the best interest rates for used cars. Having a
high credit score makes you seem less of a risk to whomever lends you the money to buy your
car. a good credit score is considered 720 or better and will qualify you for the lowest rate on
your car loan.

An excellent credit score like this will give you more negotiating power with the dealer as well,
especially if you plan to apply for dealer financing. Most dealerships, however, will attempt to
offer you a higher rate than what a bank would offer you. Keep in mind that the lower the
interest rate you get on the loan you take out, the lower the payment you have to make each
month will be.

With rates constantly changing you should check with the bank or lending institutions you are
considering using to see what the average rate is at the time. My research showed that at this
time a good rate is about 7 percent on auto loans, according to Cars Direct. But, depending on
your credit score, you may be able to lock in a lower fixed rate.

Credit unions are not popular for granting auto loans, about 20% nationwide, but if you belong
to one, you may find you can get an even lower rate than at a bank. The National Credit Union
Administration reported in 2009 that credit unions were offering loans at 5.4 % as compared to
the almost 7% by banks.



Other ways you can negotiate a lower interest rate when you finance the purchase of a used
car are:

1. The price of the vehicle. The smaller the price tag on the car you choose, the lower the rate
of interest you will pay.

2. Opt for a shorter loan term. Your monthly payments will be a little higher, but you will pay
less interest over the course of the loan.

3. Make a sizable down payment. By this I mean save some money until you can put down at
least 20% of the price of the car.



Buying a used car might not necessarily save you the most money but in this economy when
people are holding on to what they have got, if you find a good one and put just a little money
into it when you buy it, a good used car can save you money. The average age of any car the
average household has these days is ten years old. So, shop around carefully for the best
interest rates for used cars.

								
To top