auto loan rates

September 22, 2010

Auto Loans After Bankruptcy – How Does a Bankruptcy Affect Your Approval?

Carrie Reeder asked:

A recent bankruptcy will not disqualify you from obtaining an auto loan. In fact, opening a new line of credit shortly after a bankruptcy helps re-establish your credit and improve your credit history. Bankruptcy allows a fresh start. Initially, lenders may be hesitant to lend you money. However, after you have established a good payment history with new creditors, other creditors will take notice and become more willing to offer lower interest rates.

Sub Prime Lender Approval

Although a bankruptcy will not prevent you from qualifying for an auto loan, it will make it difficult to obtain a low interest rate. The interest rate plays a huge role in determining your monthly payments. On average, individuals with good or fair credit receive an interest rate of 5 or 6 percent. Individuals who have filed a recent bankruptcy can expect to pay a few points higher. A higher interest rate can increase monthly payments up to $150. Because traditional auto lenders are unwilling to negotiate low rates with recently bankrupt individuals, sub prime lenders are your best alternative.

Improve Credit History

Auto loans after bankruptcy are ideal for rebuilding credit. However, if you do not want to pay a high interest rate on the auto loan, put off obtaining a new car and apply for a new credit card or line of credit. The interest rate received on these types of credit will also be higher. By paying the balance on the new line of credit each month, you will not incur huge finance fees, and your credit report will reflect a good payment history with new creditors. If possible, try and open at least three to four new lines of credit. After you have had the new credit accounts for 12 – 24 months, now is the time to apply for an auto loan. Your credit history and score will have likely improved, thus auto lenders will have confidence in your ability to repay the loan.

Shop Around for the Best Rate

Request quotes from several auto loan brokers. Applying for a quote online is quick and convenient. Submit applicable information such as employment history, income, and desired loan amount. The auto loan lenders will obtain your credit report and negotiate the best rate with various auto lenders.


Auto Loan Rates For People With Bad Credit – How to Negotiate a Better APR

Jason Lanier asked:

Once if you come to the realization that car dealers can add interest points to your auto loan rate, buying a car to car dealership can seem like wading into very murky waters. You know that the water is dark, but you’re just not really sure what it is that’s underneath the water. With a veil of secrecy being so closely guarded in car dealerships, it can be very difficult to ascertain exactly how to negotiate the best interest rate for an auto loan. If you have bad credit, this can be even more difficult. Let’s take a look at a simple way that you can negotiate not only the price of the car, but you’re auto loan rate as well.

Car salesmen are the driving force of a car dealership. When they are hungry, more cars are sold. Playing on the anxiousness of a car salesman to make a deal, is the most effective way to get a better price and a lower interest rate. By far, the most effective way to get a lower interest rate as well as, a lower price on a car is to back out of the deal once you get into the finance office.

You see, once you have agreed to payments and have moved into the finance office to finalize your contract, the salesman starts to relax. Is actually smiling inside as he figures what he is made for commission for the sale of the vehicle. The finance manager is relaxed and working hard to build as much profit into that sale as he possibly can. By backing out at the last minute, the salesman and the finance manager will work harder to preserve the deal that they think is already done, then they will to make one in the first place. This simple little tactic of backing out and saying that you’re having second thoughts about spending that much money, can save you a couple thousand dollars on both the price of the car and your APR.


September 21, 2010

What interest rate can I expect to get on a $15,000 Auto Loan?

TrogdorTehGreat asked:

I’m 22 and I don’t have any credit. I don’t have any debt but all of my bills are in my fiance’s name so I’ve yet to establish any credit history.

I’m getting my first Credit Card this week, and intend to use it/pay it off for the next 3-5 months. I’m hoping this will at least help me build and a small amount of credit history although I know it has a lot to do with longevity but I’m in need of a car soon.

Realistically, if I have a co-signer with very good to outstanding credit, what type of interest rate can I expect on a $15,000 60 Month loan?


September 20, 2010

I have a Auto loan which they charged me 21.50% interest rate I guess due to my credit. Is that too high?

gtis127 asked:

I recently had my car repossessed due to non-payment bcause I was very sick. I am trying to refinance to get another vehicle and possibly lower monthly payments. I currently paid $498 a month in car payments. I pay over $700 a month between that and my insurance. I need help.
I have a 2005 Ford Explorer.
I never had a repo prior to this. I am just looking to refinance to get lower payments some where else. I just need a break here. Right now they need $3000 in order for me to get my vehicle back. I am a christian man and I believe GOD will take care of it.


September 16, 2010

Best Car Loan Rates – Tips To Getting a Low Auto Loan Rate Online

Carrie Reeder asked:

Online car loan shopping practically guarantees that you are getting the best rates. Your location is no longer a barrier to finding the best auto loan rate. However, you want to take advantage of the financing options available. While searching for an auto loan, research financing companies, negotiate terms, and increase your down payment to get low rates.

Study Financing Companies

A sure fire way to find the best car loan rate is to study financing companies. Only by requesting quotes and comparing the fine print can you truly know you are getting the lowest rate.

Fortunately, online auto loan brokers offer convenient ways to compare lenders. With some sites you can make side by side comparisons, while other sites will email you multiple financing offers. Auto loan brokers work hard to attract customers by negotiating lower rates with lenders, so you often will find better deals through their sites that through a dealership.

To ensure that you are getting accurate quotes, fill out the form as completely as possible. A slight difference in income or employment dates can reduce your interest rate.

Negotiate Terms

To find the best auto loan for your financial situation, you will want to balance the interest rates and length of your loan. Shorter loans offer lower rates, but with a higher monthly payment. Take a look at your monthly budget to see what type of auto loan would work best for your situation.

Increase Your Down Payment

While zero down or a slight down payment are options for car buyers, a large down payment will save you money. By putting down 20% or more, you will qualify for a lower interest rate, even if you have adverse credit. You will also save money by not paying interest on that portion of the vehicle’s price.

Demand A Better Deal

By getting pre-qualified for a car loan, you can also reduce the cost of your vehicle by demanding a better deal from your dealership. As a pre-qualified buyer, salespeople see you as a cash buyer, and they want your money. You can negotiate for rebates, higher trade-in value of your vehicle, and extra features.

To view our list of recommended auto finance companies online, please visit
this page: Recommended
Auto Loan Companies Online.


September 12, 2010

Auto Loans With Low Rates

Paul J. Marshall asked:

An individual with excellent credit will be able to qualify for the least expensive interest rates. They have the choice of taking out a 36 month loan or a 60 month loan. The shorter loan would mean higher payments but less interest over the life of the loan. The longer the length of the loan, the higher the interest rate will be. For example, an individual who takes out a 60 month car loan will pay more interest then someone who takes out a 36 month car loan even if they have identical credit ratings. Even though the interest rate will be higher for the 60 month loan, the payments will be smaller because that loan amount is spread out over a longer amount of time. The worse someone’s credit is, the more they will pay in interest.

Used car loans are also typically more expensive than new car loans. An individual with excellent credit will be charged more interest for a used car, then someone with an identical credit rating who purchases a new car. As you can see, the length of the loan, whether or not the car is new or used, and the borrower’s credit score will all have an effect on the interest rate that one is charged.

While there may be an average interest rate for people based on their credit score, the final interest rate will be determined not only based on their credit history, but also on the loan length and whether or not they purchase a new or used car. A person who has excellent credit and who wants a shorter loan on a new car will be able to qualify for the best rates. People who have poorer credit, need more time to pay off their loan and who purchase used cars will end up paying the most interest.

To find auto loans with low rates, it’s a good idea to do some comparison shopping online. You can visit a particular lenders web page and see what they have to offer. You may also want to visit web sites where you can input your information one time and then several lenders will get back to you with a quote.


Bad Credit Auto Loan Rates – How Can You Get the Best Deal at a Car Dealership?

Jason Lanier asked:

Many people are under the presumption that the real way the car dealership makes money on a car is merely on the sale price. This is simply not the case and this article will explain to you the details of how profit is made of car dealerships with a focus on auto loan rates.

The dealership has many different avenues of profit that can be drawn from during the course of a car sale. The sale price and the profit made on that sale price is only a small percentage. With new car invoices being readily available on the Internet, car dealers have had to rely on secondary sources of profit to be able to stay in business. The secondary sources of profit are commonly called back end profit or “back end revenue”.

Back end profit is the money that the dealership makes on the finance products that are sold in the finance department. These include the sale of extended warranties, credit life insurance, gap insurance, and the inflation of the customers interest rate as is allowed by the finance company.

When you get approved for auto loan at a dealership, the interest rate that you are told that you’ll have to pay is commonly more than you are actually approved for. The dealer is authorized to add interest points, or what is referred to as dealer add-on rate, to your car loan. What this translates into for you is that if you get approved at an interest rate of say, 10% then the dealership can add two, three, or up to five percentage points to your auto loan rate. The difference between what you are actually approved at and what you actually pay equates to a commission check for the dealer.


Credit/Auto loan question?

Cheyenne asked:

I am looking into getting a loan for a new car. I’m being told that my interest rate is 15%. That seems high to me. There are 3 negative marks on my credit report but all were under $500 and have since been settled. I have had an auto loan for 7 years and have never been late on a payment. I just opened a small limit credit card and pay it off each month. Should my interest rate really be that high?

Also if I open a savings account at a credit union how soon would I be able to get a loan through them?

Thanks for any advice
Yes, the dealership is finding the lender. My previous lender was Chrysler and they will only finance Chrysler vehicles so I can’t go through them. The dealership actually told me that several banks flat out denied me. I have a copy of my credit report and it’s not all that bad. I’m going to call the credit union today.


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