Congratulations – You’ve finally found the car of your dreams! If you’re planning to get an auto loan and you’ve done some advance planning, you really can get a good rate; it’s just a matter of knowing where to go from here. Generally, when we shop for a vehicle whether new or used we’re also looking at prices and trying to find something that fits nicely into your budget, as well. The interest rate you’ll pay on your auto loan may also determine what make, model and year of vehicle you’ll eventually decide on and ultimately how much you’ll be paying for your vehicle. Remember, it’s your money, so it’s important to do all you can to save as much as you can, so don’t be afraid to ask questions or try to negotiate for a better rate.

Know Your Credit

Your credit is where it all begins. Lenders make decisions based on your credit history, so it’s a good idea to obtain a copy of your credit report so you know where you stand. To do this, visit your local lending institution and simply ask for one or you can visit any number of free or fee based credit reporting agencies on line. I always visit my local credit union; they’ve been wonderful at explaining information to me and giving me helpful advice about my credit. I can’t stress enough that if you have questions or there’s something you don’t understand, don’t be afraid to ask. It’s important that you understand your credit report and that all information contained in your report is accurate.

Research

Now that you’ve determined your credit history and know where you stand, it’s time to shop around. If you’re credit rating is good, you can expect a better interest rate or even a no interest loan – and you’ll have the power to negotiate a good deal, too. While shorter loans may offer lower rates, you could end up with a higher monthly payment; so again, remember to budget a payment that works well for you and before you decide to finance with a dealership, check to see what the interest rates are. Since auto loan rates vary, you can call different credit unions and lending institutions in your area to ask what their rates are.

Get Pre-Approved

Getting pre-approved by your lending institution means you can shop with confidence since you’ll know exactly what you can afford and exactly what you’re monthly payments will be – which definitely puts you in the drivers’ seat and removes any surprise elements out of the equation. You’ll also have much better negotiating power when you’re aware of exactly how much money you’re qualified to receive for your auto loan.

Up Your Down Payment

Avoid “no money down” options, In fact, if you can swing it, up the ante by offering a nice down payment, instead. The larger your down payment, the more money you’ll save, the less interest you’ll pay.

Negotiate A Good Deal

Don’t be afraid to try to negotiate a good deal especially if you’ve been pre-approved. Dealerships will see you as being a “cash buyer” and of course, they want your money, so they’re more willing than ever to negotiate when it comes to the overall price, rebates, trade-in value (if any), etc.

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