How to Get a Lower Interest Rate on a Car Loan

Lowering your interest rate on an auto loan can save you thousands of dollars of interest over the course of the entire loan, depending on the amount you finance and the loan terms you get. Are you wondering, “How can I lower my car loan interest rate?” You might be surprised to learn that getting a lower interest rate on auto loans for your new or used vehicle is easier than you might think. All it takes is a little knowledge and effort. You’ll find out that you can lower the interest rate on a car loan for your Indianapolis purchase. 

Learn more about auto financing and how to get a lower interest rate on a car loan with our guide from Lafayette Cadillac. That way, you’ll know the answer to, “Can you lower interest rates on a car loan?”

How Can I Lower My Car Loan Interest Rate?

1. Check our credit history. You get one free credit report per year from the credit reporting agencies. Request your free credit report to see what your credit history looks like. The first step to getting a lower interest rate on auto loans starts with obtaining this report.
2. Clean up your current credit. How to get a lower interest rate on a car loan means taking action to clean up your current credit standing. Look over your current use of credit. What is your debt-to-income ratio? Do you have any outstanding credit balances? Lowering your debt-to-income ratio can lead to getting a lower interest rate on auto loans.
3. Check for refinancing loans. Make sure you know the range of interest rates you could get with your credit score and loan amount. Be sure to compare rates and payment terms from multiple places and ask your current lender for a lower rate. Always shop around to try to get the lowest interest rate possible, and then ask your current lender if they are willing to match that rate.
4. Enlist a cosigner. Having someone cosign for your loan might get you a lower interest rate on your loan, especially if you have bad credit and the cosigner has better credit.
5. Consider in-house financing. In-house financing means you’ll be making payments to the dealership instead of the bank. If you make your monthly payments on time, and consistently, then your credit score could go up, leading to a lower interest rate in the future from our dealership near Frankfort.

How Can I Lower My Car Loan Interest Rate: What Is a Good Interest Rate?

The interest rate you receive depends on your credit score as well as the size of the loan. You can sometimes negotiate the interest rate on your loan. On average, drivers can find an interest rate ranging from 3.2% to 12.9%.

Can you lower your interest rate on a car loan based on your credit score? Here are some ranges that can show you the possible wiggle room you have for negotiating.

• 800 – 740: 3.2% interest rate (on average)
• 739 – 680: 4.5% interest rate (on average)
• 680 and below: 6.5% – 12.9% (on average)

Finance Your Auto Loan With Lafayette Cadillac Near Delphi

Do you have questions about lowering your interest rate for an auto loan? Contact us or call (765) 340-7206 to discuss your options with our finance team. We’re happy to help in any way we can!

Another way to save some cash comes from our new vehicle specials. You might find a good bargain in there!