When you’re considering the option of buying a new car, you’ll likely need a loan. But getting a loan on-site at a dealership is usually your priciest option.
Research Interest Rates
Instead, start with finding out the rates for new-car loans. Shop around and focus on the APR or annual percentage rate offered by each lender. APR refers to the yearly cost of the loan or interest rate. With this number, you can easily compare offers by various lenders as long as the loan duration is the same.
Compare Loan Options
However, your best bet is likely a credit union that can offer lower-cost loans than most banks. This doesn’t mean you rule out banks altogether. Check out rates at traditional banks and online-only car lenders instead of going ahead with dealerships offering rebates or zero-percent financing if you take your loan through them because any money saved is probably being made up elsewhere.
If you have near-perfect credit and qualify for 0% interest, your dealer will likely stay firm on the sticker price. If you opt for the rebate, you probably won’t get a 0% interest deal.
Read the Fine Print
Splitting up the process makes the most sense. Start with a credit-union car loan. Next, go to a dealer and negotiate the price. If you choose dealer financing, read the fine print and be extra careful about what you’re signing up for. Dealers often add various unnecessary fees that fatten their bottom line.
Shop Early in The Week and Preferably on A Monday
Salespeople might be more motivated to give you a better deal thanks to slow sales until the weekend. The end of the month is another good time to shop as salespeople may cut you a better deal to make up their numbers.
Another way to get a great deal is to shop for vehicles that are about to be replaced or discontinued. Smart, frugal people weigh the benefits of hefty savings against the risk of potential maintenance or other issues that might crop up along the way. Auto financing works best when you do your homework and go in fully prepared. Good luck!