About Auto Rates

All about Auto Rates

To find the best auto rates, you’ll first want to familiarize yourself with some basic information about auto loans. When you shop for car loans, you have several options for financing. Each of these options is explained below.

New Auto Rates

Sources for Auto Rates

Auto rates come in various forms and from many different sources. Here are the main types and sources of auto rates, as well as some pros and cons of each.

  • Dealer financing – The majority of auto loans are fixed-rate loans that are tied to interest rates. When the Federal Reserve raises interest rates, monthly payments on auto rates will increase, while falling interest rates have the opposite effect. Dealer financing has the advantage of convenience because you can purchase and finance the car at the same time. However, dealers usually mark up the loan’s cost far beyond that of the lender. Most customers finance through the dealer, and dealers depend on this to deliver unreasonable financing terms.
  • Home equity loans – Another potential source of financing for your car is a home equity loan. Home equity loans allow you to borrow against the equity you have in your home. Home equity loans sometimes offer more competitive rates than other loans, but you could risk losing your home if you don’t make your payments on-time.
  • Beware of zero-percent financing – Many dealerships lure customers in with zero-percent financing offers, but the hidden costs of these loans can be substantial. For example, you might have the option of taking a cash rebate instead of a 0% financing offer. In most cases, you are better off opting for the rebate and going with independent financing, such as what we offer. The cash rebate can reduce the amount you have to borrow, which will save you money on the total cost of financing the car.
  • Pre-qualified loans – Applying for a loan before you go car shopping will almost always get you lower auto rates. Pre-qualification has its benefits. For one, you will become a more attractive buyer to a dealer because you have already qualified and can have the money ready to go. Moreover, when you pre-qualify, you lock in a fixed interest rate. That means that if rates rise while you’re shopping for your car, you will not risk any increases in your auto rates.
  • Variable-rate loans – Variable rate loans can be tough to find when shopping for auto rates. These loans are relatively rare but can save you money on interest payments, especially when interest rates are stable or falling. Variable or adjustable-rate loans usually offer lower interest rates than fixed-rate auto loans.
  • Refinancing – If you purchase your vehicle and auto rates have declined since then, you might consider refinancing. We can also offer you auto rates on refinancing loans. Refinancing will allow you to lock in a lower, fixed interest rate to save you money on monthly payments and the total cost of the loan.
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