How to Get the Best Car Loan at the Dealership

Buying a new car? The steps are easy. Simply scout for a good car dealership; choose the car you want, pay for it, and be out of there. Easier said than done. We all know there’s a complex bid for loans involved. If you want the best car loan, here’s what you can do:

Step 1

Find a competitive car dealership. I know it’s akin to what I mentioned above. But in any manner you buy a car, this is a significant first step. But how do you know it’s the best one? When they sell the car is it an affordable auto loan deal, with good car financiers to back it up? Just when you think you’ve found the best dealership, hold that thought and do this next step.

Step 2

Get approved for bank personal loans or auto loans. Be sure to scout for the best personal loan rates around. Most importantly, make sure you get approved for them. And then, go back to your car dealership and ask them to compete with your best loan. This may seem a pretty cocky thing to do but it’s not. It’s called nabbing the best car loan.

You see, car dealers receive wholesale loan rates from lenders. Then they give it in retail rates to car buyers. Usually, they top it off with 3% interest rate. More than that would make their rate less competitive. But if you don’t know the prevailing car loan rates, you could end up paying for more.

Step 3

Nix unnecessary add-ons, unless you really want them. You’ll be surprised at how much you can save without these things. For auto dealers, it’s just one of their ways to rip you off.

Step 4

To close the deal, sign an approved financing. There are dealers that let you sign a contract even when approval is unclear. A few days later, you’ll be notified you weren’t approved for the loan so you’ll have to do with a higher rate.

This is not fair but thankfully it does not happen commonly. But don’t be complacent. Put high regard for paperwork so you avoid getting ripped off in the end. Wait for the approval of loan no matter how inviting to drive the car home with you. Never make the mistake either to agree to the dealer’s tempting. Their profit is their priority. Not giving you the best car loan.