If you are planning on getting a new car then there are two things that you should consider. First is the price of the car and second is the terms and conditions of the car finance. Remember car loan rates are not fixed, they are definitely not written in stone and you can get the best rates. Usually, when we buy a maker the dealer links up with the lender, which is usually the manufacturer of the car like Chrysler Credit and others. But some several ways and factors can help you get the best Car-Finance rates.
Credit Rating:
Your credit rating plays an important role in sanctioning any car loan. All lenders require a credit history to measure the amount of risk. People with good credit ratings are generally categorized as low-risk candidates. They easily get car loans with low car finance rates. But people with low scores are categorized as high-risk candidates and have to pay a higher interest rate. If you have extremely bad credit ratings then you may not get finance for your car. However, people with bad credit may also avail loans to finance their cars from private lenders but with a higher interest rate.
Buying period:
This may not drastically affect your Car-Finance rate but can help you get a better deal. Buying a car at the end of the month can get you a better deal as by that time salespeople are frantic to meet their targets. This gives you an upper hand and you can bargain with them for a better deal.
Higher Down Payment:
Although most car finance companies advertise about zero down payment but by giving a high down payment you can save a lot on the interest rate. A higher down payment means that you are not paying interest for that amount. Moreover, by paying around 10%-15% as the down payment you qualify for lower Car-Finance rates. Even if you have low credit ratings a big down payment always gives you the upper hand in negotiating a good deal.
Loan Term:
The repayment term plays a very important role in determining car finance rates. More often than not higher the loan term lower the interest rate but this doesn’t mean that you unnecessarily stretch the loan term. With a higher loan term, you may be paying low interest rates every year but on the flip side, you will be paying for a long time thus increasing the total payment. You can also choose a short term and pay higher amounts every month. But whatever you do make sure that it is by the terms and conditions of the lender.
Several factors affect Car-Finance rates and knowing them will help you to better deals. As well make sure that you make regular repayments and don’t miss out on them as it may affect your credit ratings. Remember to get the best car finance rate you should be an informed customer, don’t take anyone for granted.
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