Cars have become part of our lives, and it is hard to imagine how modern life would be without them. However, cars are also among the most expensive items you can buy.
The cost of a new luxury car is out of reach for most people who have not achieved financial success. That leaves most of us with only one option if we want to own a car; that is to get a car loan.
On average, for 90+ days, delinquent auto loans have risen since 2013. According to the Federal Reserve Bank of New York, about 43,000 or 4.3% of auto loans were outstanding for 90+ days in 2021. That means a great majority of car loans are getting serviced.
So how do you make sure you get your car and still not condemn yourself to debt for the rest of your life? Read on to discover how to get a lower auto loan interest rate without refinancing..
How to Get the Best Annual Percentage Rate (APR) on a Car Loan
Borrow from Credit Unions
Most people choose to get Car Loans from Social Finance or similar lending entities because their requirements aren’t stringent. With a good credit rating and a salary, it is usually possible to get yourself a loan.
If you are an older friend, you probably have heard them say it is wise to balance your debts and earnings. Credit unions tend to offer loans on terms that make it easy to repay your loan.
Inquire Around
If this is your first car, the chances are you are a student, and you could benefit from a student car loan. Unfortunately, institutions that offer students car loans don’t advertise their loans. But you can get such loans with ease if you make a formal request.
Asking if they provide a student car loan will mean that you are serious about it. They may consider it even though you still do not have a credit history.
In such cases, the lender will consider the degree you are taking and may even request that you provide them with some of your transcripts. They will then use that information to gauge the chances of you getting a job immediately you graduate.
If they believe your chance of being hired is higher than average, they will consider offering you a student car loan.
Consider the Interest
When you finally get a chance to discuss the terms of your car loan, the lender may try to make it look like they are doing you a favor. For example, they may emphasize that you do not have the money to buy a new car in cash, but they are there to help you.
While they will be giving a loan, you need to remember you will be the one paying for it. Therefore, it will be in your best interest to negotiate to lower the interest rate to a reasonable level.
Get a Co-signer
Your loan co-signer will guarantee the lender they will get back their money faster and with a much lower risk of default. That will help you get lower interest rates, which means you will repay your loan quicker and find repaying your loan manageable.
Consider the Car Loan and the Car Itself
When getting your car loan, focus more on the quality and reliability of the car you want to buy. You don’t want to end up spending money to repay your loan and fix the new vehicle simultaneously.
Moreover, the most expensive car may not be the most reliable, so you need to find which car most people with families favor.
Once you have a car with great reviews online and from people you know have driven it, you can talk to your lender.
Overall, when buying a car using a loan, make sure the interest is reasonably low. In addition, the repayment period should not be overly long, and the car should be reliable and easy to maintain.
Conclusion – How to Get the Best APR on a Car Loan
You can get the best APR if you prove that you can repay the car loan without defaulting. And for that, you need to have a good credit rating, collateral, or a co-signer with good credit. However, a low APR should not be your only concern.
You should also make sure you get a reliable car. That makes it easy for you to focus on repaying the car instead of regular repair costs. Contact Social Finance today to get a lower auto loan interest rate.