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The average auto loan rate for someone with excellent credit is 5.25%, according toCNN.
Youre not without options for scoring a good auto loan rate.
Here are five ways to get the best auto loan rates asa first-time car buyer.
Build Your Credit Score
The better your credit score, the better your interest rate.
Super prime credit is between 781 and 850 and will get you the lowest rate.
For a used car, youd be able to keep it below 10%, which is not terrible.
Good payment history makes up 35% of your score.
Making payments on time can raise your score in a matter of months.
Compare Lenders
When shopping for low auto loan rates, never take the first offer.
Go to several lenders, discuss their reasons for the rates they offer and dont settle.
Another tip is to get pre-qualified from multiple lenders before looking for your car.
This will give you negotiating power when you go to the dealership.
Giranda says, Pre-approval gives you a clear idea of your budget and can strengthen your negotiating power.
Look for Ways to Reduce Rates
Many lenders will offer you a discounted rate forvarious special reasons.
This is because there is no equity in the car.
Ultimately, your first car purchase will help you increase your credit score over time.
Just be sure not to take onso much debtthat you end up unable to make the payments.
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