Compare interest rates from multiple lenders, including banks, credit unions, and online lenders. You can use a car loan calculator to estimate your monthly payments and total interest paid over the life of the loan.
2. Get pre-approved for a loan.
Getting pre-approved for a loan can help you negotiate a better interest rate with the dealer. It will also give you a better idea of how much you can afford to spend on a car.
3. Make a larger down payment.
The larger your down payment, the smaller your loan amount will be and the less interest you will pay. If you can afford it, try to make a down payment of at least 20% of the car's purchase price.
4. Choose a shorter loan term.
The shorter the loan term, the lower your total interest payments will be. However, keep in mind that a shorter loan term will also result in higher monthly payments.
5. Consider getting a co-signer.
If you have a low credit score, you may be able to get approved for a car loan with a co-signer. A co-signer is someone who agrees to repay the loan if you don't make the payments.
6. Be aware of add-ons.
Some dealers will try to add extra charges to your loan, such as GAP insurance or extended warranties. Be sure to read the loan agreement carefully before signing anything, and only agree to add-ons that you actually want and need.
7. Consider refinancing your car loan.
If you find that you are paying a high interest rate on your car loan, you may be able to refinance it with another lender at a lower rate. Refinancing can save you money on interest over the life of the loan.
