MagnifyMoney can help you find the auto loan that's right for you. Getting preapproved for an auto loan can help you walk into a car dealership with confidence and secure you the lowest interest rate. You can use our tool below to find the best deal.Learn More
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Shopping for an automobile can be extremely stressful, even under the best of circumstances. You have to negotiate the cost of your automobile, determine the cheapest way to finance the car and make decisions on costly warranties. The internet has made comparing the cost of cars much easier. Websites like TrueCar help you get “actual, upfront pricing” by seeing what other people have paid. However, the dealership makes most of its money with financing and warranties. And far too many people walk onto dealership lots confident in what car they want to buy, but clueless about how they are going to finance it.
Every borrower should follow a simple rule: obtain financing before walking onto a car lot, and force the dealership to beat it. In a worst case scenario, you found the best deal online. In a best case scenario, the dealership is actually able to offer cheaper financing.
You should not worry about your credit score when searching for an auto loan. All inquiries in a 30 day period only count as one inquiry. So make sure you do all of your comparison shopping in a 30 day period, and look for the best deal.
The auto dealerships will not be happy that you walk onto the lot with financing in hand. However, they will still be keen to make some money from financing. Don’t be surprised if the dealership is able to beat the deal you obtained in advance. But feel good about that savings.
Make sure you compare the total cost of the loan and not just the interest rate
Compare APR which includes the cost of the origination fee
Compare offers and get preapproved for a loan before going to the dealership
Loan in hand gives you the bargaining power & flexibility to negotiate with the dealer on the price of the car
Zero percent financing from the dealer/manufacturer might not always be the best deal for you
Do the math. Getting a rebate on the car price with your pre-approved loan might be a lower cost option for you
Make sure there is no pre-payment penalty
If you pay off the entirety of the loan early to save money, don’t let the bank charge you.
Focus on the total interest cost to you and not just monthly installment
A longer term loan with higher interest rate can have a lower monthly installment, but you will pay thousands more in interest cost until it is paid off.