Pay for a Car: Auto Loans and Bank Rate Auto Loan Calculators

Pay for a Car: Auto Loans

  • Comparison shop. Start with Bankrate.com. Another great site for comparison shopping is Interest.com.
  • Get financing through an independent lender. Dealer financing is usually more expensive than car loans through banks or credit unions.
  • Before shopping for a loan, check your credit report. Correct any inaccuracies that may hurt your credit rating. Remember that interest rates are usually tied to your credit score. Better credit scores result in lower car payments.
  • When interest rates are low, consider refinancing your auto loan. Comparison shop for auto loans offered by different banks. Consider all fees associated with the loan. Some banks may offer loans that appear to be great, usually in the form of a low APR, but then require massive loan fees. Do your research first, and don’t be fooled by these tactics.
  • If possible, pay for the car in cash or make a large down payment. Banks are often willing to give better rates when you are willing to have a larger down payment.
  • Always get the shortest term loan possible, because you usually get a lower interest rate with shorter terms.
  • Be wary of using your home's equity for a line of credit. Cars usually depreciate. Homes typically appreciate in value. Tapping your equity can be a great way to ensure a loan, but don't rely on this source unless you are unable to qualify for a loan or unless it's the best rate available.


Bad Credit Auto Loans Advice. Get a Fast Car Loan Online

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Where did you get your car loan? 2 comments

monicamelendez profile image

monicamelendez 4 years ago from Salt Lake City

I'm lucky that I was able to pay cash for my last car. The last time I got an auto loan, I seriously got hosed and had to pay 8%. I ended up paying thousands and thousands of dollars interest. I am planning on never getting another loan to pay for a car.


arizonataylor profile image

arizonataylor 4 years ago from Arizona Author

If you can pay cash, you avoid costly interest, and you increase your bargaining potential. However, interest rates can be very low right now. IF the interest you are paying for a car loan is lower than the returns you can potentially earn in another investment, then getting a car loan actually pays off in the long run. This is true even if you have enough money to pay cash for your car.

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