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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: visualspace/Getty Images September 19, 2022 Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Bankrate logo

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo

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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The key to getting a good deal on an is shopping around. You’ll want to compare rates from multiple lenders — as well as fees and other costs — to ensure you select the best quote. Your income, current debts and credit score will all play a role in what you qualify for. So don’t rush into a loan. Careful preparation could help you save thousands over the life of your loan.

This first step is crucial. If you don’t already know, check your before you start applying. It will guide you toward lenders you qualify for — and reduce rejections. It will also help you understand the you may receive. If your credit score is on the higher end, you’re more likely to get lower rates. Likewise, a lower credit score, or a history of missed payments, may result in higher rates. To illustrate, the for new and used car loans for borrowers with credit scores between 781 and 850 is 2.96 percent and 3.68 percent, respectively. These figures increase to 12.84 percent and 20.43 percent for borrowers with scores between 300 and 500. Consider signing up for a free Experian account to and score or use the FICO Open Access Program to get free access to your scores. You can also check out Capital One’s CreditWise, Discover’s Credit Scorecard or Chase’s Credit Journey to view your credit profile.

If you have some time to spare before getting a new ride, consider taking steps to before applying for a loan. Start by reviewing your credit report, highlighting any errors that could be dragging your score down and filing disputes promptly. Also, take these actions to help boost your credit health: Make timely payments. Paying your bills on time is vital, as payment history accounts for 35 percent of your credit score. Bring past-due accounts current to avoid continued negative credit reporting. Pay down your revolving balances. Credit utilization, or the percent of your credit limit in use, makes up 30 percent of your credit score. Your credit utilization rate shouldn’t exceed 30 percent for the best credit score. Don’t apply for new credit. Each credit application results in a hard inquiry that could ding your credit score by a few points. Several inquiries in a short period (excepting loan rate-shopping) could do even more damage to your credit score.

Already have a mortgage or ? A long-term established relationship with a bank or credit union? Use these to your advantage. Lenders may consider your positive history together when you apply for an auto loan. This could mean an easy application process or result in lower rates. It’s not guaranteed, of course, but borrowing from a lender you already use may mean you pay a little less in the long run.

Local banks and are a good starting place if you don’t already have a regular lender. Big banks advertise lower rates, but they’re harder to qualify for. Local lenders often have less strict criteria, like income levels and credit scores, than their national counterparts. The downside is that it may mean a waiting period. Some credit unions and small banks require you to open an account. Then you may need to wait a few weeks to a few months before you can . This isn’t always the case, but review the fine print to check. If you’re not in desperate need, it’s likely worth the wait to make a more budget-friendly decision.

Start locally but don’t limit your options. An auto loan will only count as one inquiry on your credit report — even if you send out applications to dozens of lenders. But this is only true if you apply within a 14-day period. The more lenders you submit applications to, the more flexibility you’ll have. This is the best way to ensure you get a solid quote on an auto loan. If you’re vying for a or a competitive interest rate, applying with multiple lenders is the surest way to get there. You can apply with traditional banks, credit unions and online lenders. Regardless of which you decide to do business with, compare APRs, loan amounts, loan terms, credit requirements and fees to ensure you choose the best fit. Many lenders also offer 30 days of to shop around with. Once you apply, you’ll have time to pick the best option for your finances and scope out dealerships for the right car.

It’s not all about interest rates or monthly payments. Lenders may charge additional fees — like origination or . This can mean less money to spend on a vehicle or a penalty if you decide to make extra payments toward the principal. Other fees, like late payment fees, are also important. Consider what other expenses might contribute to the cost of your loan when you receive a quote from a lender.

Once you’ve received quotes from lenders, see what the . Be prepared to reject like gap insurance or extended warranties. Try to get to the meat of the loan: Interest rate, fees and total cost should be at the forefront of your discussion. Dealerships tend to upcharge on interest to make money. But sometimes, dealerships can score you a more — if you already have financing lined up. If you’re offered a better quote, there’s no reason you shouldn’t take it. And if the dealer can’t match it, you won’t be pressed to accept a bad loan.

Research local dealerships to find the ones with good reviews and extensive inventory. Inquire about you may qualify for if you’re considering a hybrid or electric vehicle. Compare prices on sites like Edmunds or Kelley Blue Book (KBB) if you’re . Look into the manufacturer’s current deals and offers, including , if you’re buying a new car. Pay attention to differences between trims, like safety features, fuel economy and tech.

It’s hard to overstate the importance of shopping around for quotes when buying a car. You’ll likely spend upwards of $48,000 (or $33,000 or more if buying used)— so getting the lowest interest rate possible is worth the effort. Most importantly, remember that even a slightly higher interest rate could cost you several hundred or thousand dollars more in interest over the life of the loan. Learn more SHARE: Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites.

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