GOBankingRates

All You Need to Know About Car Loans

You have too much to worry about to be bogged down by car loans that are designed to make a profit at your expense. While auto financing is an unavoidable reality for some, searching for the best car loan rates can keep your finances balanced throughout the year.

There are several different types of car loans including new car loans, used car loans, pre-approved loans and refinancing. GOBankingRates brings you the facts you need to find the right loan for your next car.

How Car Loans Work

When borrowers of new or used car loans finance a vehicle from a lender, the financial institution considers the car collateral. The car is used as security, in the event that the borrower defaults on the loan.

Used cars are more likely to wear down and become inoperable due to age, condition and maintenance issues, which is why some lenders increase the range of used car auto loan rates to protect themselves from this potential loss. On the other hand, newer vehicles - while still facing an immediate depreciation just driving it off the dealership lot - do not pose as great of a loss, should the borrower be unable to make good on repaying their auto loans.

How to Find the Best Car Loan

There are a number of factors that contribute to the car loan rates you'll be offered by a lender.

FICO Score: A person's FICO score is one of the most influential guides that lenders use to determine whether borrowers are risky to lend money to.

Auto Loan Term: Another way lenders protect themselves and ensure that they get their money back on time and in less time, is to provide lower car loan rates for shorter car loan terms and slightly higher rates for longer terms.

Vehicle Type: As shared above, the age of your vehicle can play an important role in what rate you're offered.

Down Payment: Having an adequate down payment can help do a number of things like lower the total amount you'll need to finance , and by directly affecting the auto financing interest rate, even with dealer financing.

Best Car Loans Rates

Most Read Car Loans Articles

5 Car Loan Mistakes That Cost Jacksonville Residents Hundreds

Looking to save money on your next car purchase in Jacksonville? Learn how to avoid these five costly mistakes.

Read More »

5 Best Car Loans in Portland, Oregon

Shopping for a car? Find out where to get the best car loans Portland, Oregon has to offer.

Read More »

How Your Fort Worth Auto Loan Affects Your Lifestyle

Learn how a Fort Worth auto loan can impact your budget and lifestyle.

Read More »

5 Steps to Get a Low Auto Loan Rate in St. Louis

Arsenal Credit Union offers competitive auto loan rates. Find out how you can get a low rate on your next vehicle.

Read More »

5 Reasons a 1.99% Used Auto Loan Beats a New Car Loan in Washington, DC

Learn five ways how a used car beats out new car promotions and cash back deals.

Read More »

How to Refinance Your Car in Dallas With Air Force FCU

Find out how Air Force FCU's auto loan rates starting at 1.49% APR can help you save on transportation costs this year.

Read More »

10 Best and Worst Features of Cars for Sale in Dallas

Learn about the best and worst features you can find in cars for sale in Dallas.

Read More »

5 Ways to Save Money on a Car in Fort Lauderdale

See how much you can save on your car with help from We Florida Financial.

Read More »

Types of Car Loans

Before you begin shopping for a car, it is important to know what auto financing qualifications you meet. Typically, auto loan rates are calculated based on the type of car you want to buy and your credit history. Additionally, you can get financing directly from a bank or have the dealer finance your auto loan.
  • Bad Credit Auto Loan
  • Used Car Loan
  • New Car Loan
  • Preapproved Auto Loan
  • Dealer Financing
  • Auto Refinance Loans

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Comments