Getting Auto Dealer Loans With The Best Rates

When shopping for a new car or truck, and you're trying to get the best auto dealer loans, it's good to have a few tricks up your sleeve in order to get them to offer you the best interest rates possible. Typically, auto dealers will try to pad interest rates and earn a little money on the backend of the deal. What this means is simple. The lender actually approves your loan at one rate and the dealer offers you a interest rate that is slightly higher. It is legal and is a lot more common than you might imagine. Not all dealers do this of course; however, it is always prudent to be aware it can occur.

If you're careful and do your homework, you can walk away from the bargaining table with a substantially lower interest rate - that is if you have good credit. If you have less than perfect credit, you may also be able to get a better deal at the dealership, but not always. Regardless, it is always best to shop around and get different rates before you visit the dealership.

Get Pre-approved
One very effective way to deal with the lending department at the dealership is to get pre-approved. When you pre-arrange financing and have a check in hand, you literally force the dealership to compete for your loan business. While the dealership might not be able to pad, or add a point or two to your interest rate, the dealership would still rather have you finance the vehicle through one of its preferred lenders. The dealership may also receive other types of incentives for sending a particular lender a car loan deal. The captive finance company or the car manufacturer’s own finance company also requires a certain number of finance deals be submitted through every dealership. Ultimately, the dealership really wants you to finance your vehicle through them.

If you opt to visit the dealership with a pre-arranged loan check in your hand, the dealer will probably pull out all the stops in offering you the best interest rate available. Just because you have prearranged financing doesn't mean you have to use it. You can always simply returned the check to the lender and tell them thanks, but no thanks.

Captive Finance Companies Special Offers
With today's car company crisis and poor economy, car manufacturers are doing everything they can to increase sales and revenues. Many car companies are offering very attractive interest rates on loans; however, not everyone will be able to qualify for these loans. Special offer interest rates, such as the ones you see on the commercials, are generally reserved only for those with the best credit. However, if you do have good credit, you will be able to take advantage of some low interest rates.

Increase Your Down Payment
When you increase your down payment, you will be eligible for better rates no matter where you choose to finance a vehicle. The reason for this is quite simple - the lender's risk has been lowered. When a lender loans an amount on any vehicle that is much less than the vehicle is worth, the lender feels much more secure in making the loan, and also in offering a better interest rate. A lender's risk will always determine the interest rate that the company offers; therefore, when you reduce their risk, they reward you with a lower rate. In short, more money down means a lower interest rate.

These are just a few ideas to keep in mind, when you visit the dealership. Of course, there are other ways to get the dealership to work with you and perhaps offer lower interest rate. One of the most effective ways, is the simply walk out and leave. Make sure they have your telephone number; if they want to make a deal, they will contact you.