Nov 6th, 2007 by jbrown
Cars.com has some advice I found helpful on how to get the best Interest Rate. They give you several primary factors that determine your interest rate:
- Your lender. Unless you borrow money privately, you’re going to be working with a bank, a credit union or an automaker’s financing arm. There are various pros and cons to each scenario.
- The car you’re buying. Are you buying a new car? A used car? A very used car? New car rates are oftentimes the lowest.
- Loan term length. When automakers first introduced 0 percent financing to keep cars selling after the Sept. 11 terrorist attacks, they were only offered on two- and three-year loans. Now, some automakers are offering 0 percent financing on five-year loans. But in general, longer loans have higher interest rates.
- Your credit rating. Borrowers with better credit get lower rates. Jack Gillis, public affairs director for the Consumer Federation of America, estimates that only 15 percent of car buyers qualify for 0 percent offers from automakers. He also reminds that these loans are designed to sell otherwise unpopular cars.
They even give you some advice on used or new. I suggest this as a read before you go out to finance any car.