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Shopping for money
Having a loan approved in advance lets you focus on price negotiations.
In Lesson 17
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| 36 month new | 6.90% |
| 48 month new | 7.05% |
| 60 month new | 7.11% |
| 36 month used | 7.39% |
Money 101 Lessons
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When you go to a car dealership to negotiate for a new car, you're in a stronger position if you have a pre-approved loan. Unless your model has a special low-rate financing offer backed by the manufacturer, a local bank or credit union is likely to give you a better deal on a loan. And in most cases, you can take a rebate in place of any low-rate financing and use that to lower your purchase price.
Credit unions typically charge 1/2 percent to 1 percent lower interest than bank car loans. You may have access to a credit union where you work, or may be eligible through a professional organization (teachers, government employees).
If you don't have ready access to a credit union, check out your local bank offerings. Web sites specializing in loan information will give you a quick rundown on average rates and the best rates in your area.
When you get a pre-approved loan, that commitment usually is good for a month or more. So you can shop for the car you want knowing your financing is ready to go.
In addition to getting financing before you go to a dealership, you also need to do your price homework. That's our next lesson - setting your target price.
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