Compare Interest Rates
Comparison shopping means more than just pricing out the car or truck you want. Also investigate interest rates on financing from different sources. Start with the relationships you already have – your bank, credit union, finance or mortgage lender. Auto dealers also can offer a range of options from multiple sources. Another resource is the Equifax Rate Finder, a free tool that tells you the interest rates lenders are offering on a specific loan type to consumers with your FICO credit score in your geographic location. This information can confirm when you have found a good deal, or point you in the direction of a better one.
Once you have decided on a vehicle and you are ready to finalize your purchase, you still have one more opportunity to lower your costs.
Negotiate Your APR
Ask about special financing incentives – these are often limited to certain models, makes or model-year vehicles. If no special financing offers are available, you can negotiate your APR just like you negotiate the price of the vehicle. Keep in mind that credit history, current interest rates, market conditions, special offers and competition can impact the interest rates you are likely to receive. Having a holistic picture of your credit history can help strengthen your negotiating position.
Score Power, available at www.equifax.com, is a convenient way to learn more about your credit score. This tool comes with a copy of your Equifax Credit Report, an explanation of what your score means, information on how it compares to national averages and a graph of how lenders view you. You also can use the Interactive Score Simulator to understand how your actions may impact your score.
It may not be the most exciting part of buying a new vehicle, but the extra research you do to secure favorable financing can yield big dividends in the form of lower monthly payments. Happy shopping!