Because more people are financing their car purchases, lenders have been
competing for borrower business. This means that rates are very competitive.
This article will offer tips on how to get the lowest car loan rate possible:

Know the Prime Rate
The federal government sets a prime interest rate, and lenders usually base
their auto loan rates loosely on it. In other words, when the prime interest
rate is set low, interest rates will be low from lenders. Conversely, when the
prime interest rate is high, interest rates will generally be high. Keeping this
in mind, it is a good idea to take a look at what interest rates are doing
before shopping for an auto loan rate. If interest rates are on the higher side,
it would be naïve to expect a rock-bottom interest rate on a car loan.

Improve Your Credit Score
There are several factors which help to determine what sort of interest rate a
person can secure for a car loan. Credit scores are very important, as these
scores tell lenders what sort of payment history a person has. It is unlikely
that a loan applicant with poor payment history will be offered an attractive
interest rate.

Understand How Your Loan Works
The particulars of the car also can affect the interest rate, as some lenders
give higher interest rates to older cars. Interest rates are also influenced by
the length of the loan — if a loan term extends beyond 60 months, the interest
rate will likely be higher.

Shop Around
Check out interest rates with a bank or credit union before walking into the car
dealership. Securing a loan beforehand is a great negotiating tactic. Sometimes
dealerships will have the ability to offer a lower interest rate.

Armed with this knowledge, a car buyer can potentially obtain a low car loan
rate. Make sure your credit rating is squared away before even shopping for a
car, spend some time looking around for a low rate, stay away from older cars,
and keep the loan terms as short as possible.

To see a list of recommended lenders for
low interest rate car loan,
or for a bad
credit history car loan, visit ABC Loan Guide.