How to Find the Best Auto Loan
Love it or hate it, car shopping is full of challenges. Even after you've researched the best vehicles for your needs and practiced negotiation tactics, there's still the matter of finding the best car loan. Very few people are able to pay for a car upfront, which means that there's a major market for car loans in the United States. You have plenty of options, and you don't want to settle for a low-quality loan. You put a lot of effort into choosing the best car. If you put that same effort into choosing the best loan, you can find some great rates and other incentives. Here's how to get started.
Avoid Dealership Financing
Most auto dealerships offer their own financing options. Those options can be tempting, especially because they offer a lot of convenience. Customers can commit to a car and a financing option in the same place.
There's a downside to that convenience, though. You won't get the best rate from the dealership - far from it, in fact. Car dealerships have high interest rates because in-house financing provides a fairly large chunk of their income. They'll make far more money off a car sale if they can convince the buyer to finance with them, too.
Know What You Need Upfront
Before you walk into a dealership, you should already know what kind of car you want. This way, you're less likely to find yourself trapped by upselling tactics.
There's another reason to do your car research upfront: it'll help you find a good auto loan. By knowing what kind of car you want, you can find out how much money you need, and that knowledge will help you when you apply for a loan.
Go Local First
You know how much money you need, and you know not to get it from your car dealership. The next step is to find the best source for your loan. Your options include loan stores and large banks, but a better option is to go to a local bank first. People generally find better rates at smaller banks, and lending requirements are sometimes less strict.
Another option is to get a loan from a credit union. While you'll have to become a member of a credit union to get a loan from one, many people find that becoming a member is worth it. Credit unions often offer better interest rates because they're not trying to make a profit.
Compare and Shop
For the best auto loan rates, try not to rush the process. Instead, shop for options and compare your choices. Flashy loan stores and megabanks will try to grab your attention first and get you to commit fast. So will auto dealerships with in-house financing. However, you'll save a lot of money if you put your foot down and insist on going over your options first.
Bundlefi can help you with your research. We'll help you compare your loan options from small banks, credit unions, and other financial institutions that offer better choices than megabanks. Take a look at your Bundlefi options now to get started.