Before purchasing a new or used car, you should always do some research not only about the type of car you want to buy, but also the best auto loan rates. In addition to the interest rate, you also need to consider the length of the loan, your down payment, and your credit score.
Depending on the length of your loan you will pay more or less interest. An average standard auto loan rate for 48 months will run approximately 2.8%. An average seventy-two month loan will offer approximately 3.5% interest. These rates are for a standard loan through a bank or credit union. You may be able to find cheaper rates if you get a loan through an auto finance company. The savings could be around .5%, which might not seem like much but adds up over the years of your loan. You will need to compare rates for new car loans by researching your local bank, your dealer financing, and independent auto financing companies.
Saving money on used auto loan rates is also important, especially because they're riskier and more expensive. When financing a used car for 48 months, expect to pay an average of 4% interest. If you finance for a longer period of time, you will pay more interest. You need to compare rates before you begin shopping for a used car and make sure the payments will fit into your budget.
When financing a new or used car the loan rates make a huge difference in what you can afford and the type of car you can buy. If you have money saved for a down payment, you may be able to reduce the number of years you need to finance the automobile which will save you money with a lower interest rate. If you have great credit you will also save money on your loan rate. Although people with bad or no credit can usually find an auto loan, you will definitely pay higher rates.
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