What is a good auto loan interest rate
The most common question we receive from applicants is, "What kind of interest rate can I expect for my auto loan?". Premier Auto Financing will be able to offer you the lowest possible interest rate for your financing. The interest you receive will depend on a couple of aspects.
Important Factors the Determine Interest Rates:
1. What kind of credit you have in the most critical factor in determining interest rates. Obviously, individuals with bad credit are going to receive higher interest rates than those with good credit. People with no credit will receive a higher rate than individuals with good credit but less than bad credit applicants.
2. Are you buying a new or used vehicle? New cars tend to have lower interest rates than new cars. Determine if buying new or pre-owned is better for you.
3. How much are you looking to borrow? A typical rule of thumb is, the more you borrow, the higher your interest rate will be.
4. How much down payment are you going to leave? If
you leave 20% or more, you can expect a lower interest rate than if you leave no deposit. Regardless of what kind of deposit you leave, your chances for approval will remain the same. Also, the interest rates listed below are based on minimal or no down payments.
5. How long do you want the length of the loan to be. The longer the loan term, the higher the interest rate associated with both new and used car loans. You will end up paying less monthly but more money in interest over the life of the loan.
** If you have bad credit or no credit, having a co-signer for your auto loan will help you obtain a lower interest rate than if you were to apply on your own.
Below is a table with hypothetical breakdowns of what one can expect to pay for their auto loan interest rates.
It is a good idea to check out the car loan calculator to see what you can afford. Understanding how car loan payments work is also important.Source: www.premierautofinancing.com