Are Auto Loan Rates Negotiable?
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In this economic environment, everything is negotiable, including auto loan rates. You need to do your homework and know how to handle the process the right way to get the most value for your money.
The best way to negotiate an auto loan rate is to know your financial status (i.e. credit score, down payment amount, car budget), use all the available resources for finding an auto loan (i.e. credit union, online loan providers and your local bank) and comparison shop like a pro. Take extremely detailed notes, document all your conversations and the people you spoke with, and truly educate yourself to become more confident in the negotiation process.
There are several reasons why auto loan rates are negotiable. The market is flooded with lenders and especially now, they are all hungry for business. Plus, they want to build a good rapport for long-term relationships. If auto loan companies negotiate a great rate with you the first time, you will more likely remember the positive experience and provide them with repeat business and referrals.
If you are choosing to secure an auto loan directly through the dealer, there are several tips to follow to protect yourself. Never mention to the dealer that you plan on using their financial services as they can use that information as leverage. You will typically also find better deals when shopping at the end of the month, and when you look for older models.
