Open navigation Main Menu Mortgages

Financing your home purchase or refinancing your existing loan Finding the right lender Additional Information

Looking for a financial advisor? Take our 3 minute quiz and then match up to an adviser today.

Main Menu Banking

Compare Accounts Use Calculators Get help from bank reviews

Looking for a financial advisor? Try our three minute test and then match up with an advisor today.

Main Menu Credit cards

Compare by category Compare by credit needed Compare by issuer Get advice

Are you looking for the perfect credit card? Narrow your search with CardMatch(tm)

Main Menu Loans

Personal Auto Loans and Loans for Students Calculators for loans

Find an individual loan in just 2 minutes or less Answer some questions to get offers–with no effect on your credit score.

Main Menu for Investing

Best of Brokerages and robo-advisors . Learn the basics Additional information

Looking for a financial advisor? Take our 3 minute quiz and then match up with an advisor today.

Main Menu Home equity

Get the best rates Lender reviews Use calculators Knowledge base

Looking for a financial advisor? Try our three minute test and then match up the advisor you want today.

Main Menu Real estate

Selling a house Buying homes Finding the right agent Additional sources

Looking for a financial advisor? Try our three minute test and connect with an advisor today.

Main Menu Insurance

Car Insurance Homeowners insurance Other insurance Company reviews

Looking for a financial advisor? Try our three minute test and then match up with an advisor today.

Main Menu Retirement

Accounts and retirement plans. Find out the basics about retirement calculators Additional Resources

Looking for a financial advisor? Take our 3 minute quiz and connect the advisor you want today.

Search open Close search

Submit

9 tips to get a good deal on your first auto loan Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial choices by offering financial calculators and interactive tools, publishing original and objective content. We also allow you to conduct research and compare data for free – so that you can make informed financial decisions. Bankrate has partnerships with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that compensate us. This compensation could affect how and where products appear on this site, including, for example, the order in which they may be listed within the categories of listing in the event that they are not permitted by law for our mortgage, home equity and other products for home loans. But this compensation does not influence the information we publish, or the reviews you see on this site. We do not cover the vast array of companies or financial offers that may be accessible to you.

SHARE:

On This Page On This Page

Prev Next

praetorianphoto/Getty Images

6 minutes read. Published September 30, 2022

Written by Allison Martin Written by

Allison Martin’s career began more than 10 years ago as a digital content strategist, and she’s since been published in numerous prestigious financial media outlets including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

Editor: Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate since late 2022. He believes in the clarity of his reporting, which helps readers confidently find deals and make the most appropriate choices regarding their finances. He specializes in small and auto loans.

The promise of the Bankrate promise

More details

At Bankrate we aim to help you make better financial decisions. While we adhere to strict ethical standards ,

This post could contain the mention of products made by our partners. Here’s an explanation for how we earn money .

The Bankrate promise

Established in 1976, Bankrate has a proven track history of helping people make informed financial decisions.

We’ve maintained this reputation for over four decades by simplifying the process of financial decision-making

process and providing people with confidence about the actions they should take next. process and gives people confidence in the next step.

You can rest assured you can trust us to put your needs first. Our content is created by and edited by

who ensure everything we publish ensures that everything we publish is accurate, objective and trustworthy. Our loans reporters and editors concentrate on the things that consumers care about most — various types of loans available, the best rates, the top lenders, the best ways to repay debt, and more . This means you’ll be able to feel secure when making a decision about your money.

Integrity of the editorial process

Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters produce honest and reliable content that will aid you in making the best financial decisions. Our main principles are that we value your trust. Our goal is to provide our readers with reliable and honest information, and we have standards for editorial content in place to ensure that this happens. Our reporters and editors thoroughly check the accuracy of editorial content to ensure the information you’re reading is correct. We maintain a firewall between advertisers as well as our editorial staff. Our editorial team doesn’t receive direct compensation by our advertising partners. Editorial Independence Bankrate’s editorial staff writes in the name of YOU the reader. Our goal is to give you the most accurate advice to aid you in making informed personal financial decisions. We adhere to rigorous guidelines that ensure our content isn’t in any way influenced by advertising. Our editorial team receives no any compensation directly from advertisers and our content is thoroughly fact-checked to ensure accuracy. Therefore, whether you’re reading an article or a review, you’ll be able to trust that you’re getting credible and reliable information.

How we make money

You have money questions. Bankrate has the answers. Our experts have been helping you master your money for over four years. We are constantly striving to provide our readers with the professional advice and tools required to succeed throughout life’s financial journey. Bankrate follows a strict standard of conduct, so you can rest assured that our content is honest and precise. Our award-winning editors and journalists produce honest and reliable information to assist you in making the best financial decisions. Our content produced by our editorial staff is factual, objective and uninfluenced through our sponsors. We’re honest about the ways we’re in a position to provide quality information, competitive rates and useful tools for you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the placement of sponsored products and services, or through you clicking specific links on our website. Therefore, this compensation may influence the manner, place and in what order products are displayed within the listing categories, unless the law prohibits it for our mortgage or home equity products, as well as other products for home loans. Other factors, like our own proprietary website rules and whether a product is offered in your region or within your self-selected credit score range can also impact how and where products appear on this site. We strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

The process of buying a car to the very first time is to be one some of the more stressful experiences available. With so many aspects to consider about the actual car, the loan could fall by the wayside. Don’t let it. It isn’t easy to find a loan — but the more you can do now you do, the better off your finances will be later. Low interest rates are the most important factor to a low-cost car regardless of what you end up buying. 1. Be honest with your budget. The most important factor when purchasing a car must be the cost. Be aware of the amount you be paying each month as well as the overall interest paid to . You should also think about the maintenance costs you expect to pay for as well as insurance and fuel costs. All contribute to the amount you spend. Experts recommend spending no greater than 10% of earnings on your car. Utilize an estimate tool to calculate monthly payments and total interest paid. Then check resources like Edmunds and Kelley Blue Book to see what you can expect to spend on the cars you’re considering buying. What you should take away from this is

Assess your financial situation to decide if you are not stretching your budget too far.

2. Be aware that longer terms translate to more expensive vehicle is increasing. It’s not difficult to find an loan lasting six or 7 years but they have a major negative. A longer loan term does mean an lower monthly costwhich can be beneficial if you are in a tight financial situationhowever it will result in higher interest rates overall. Even if you purchase an inexpensive vehicle it is possible to quickly be debt-ridden or owe more than it’s worth. For that first car loan pick the shortest period you can reasonably afford each month. It may mean you have cut back on some other ways, however it’s certainly the most secure choice to protect yourself from having to pay more for your car than it is worth. It is the most important lesson to take away

It’s likely that you’ll save money in interest with a shorter loan duration and reduce the chance of becoming upside down on your car loan.

3. Review the credit score and report. Your credit score is the primary aspect that lenders look at in determining your interest rate. In order to get a fair deal, you will need excellent credit. You will also need a history of on-time payments. If you’ve never had the chance to build your credit score or history and history, you’ll have a tough time finding a good deal. There may be a need to apply this, which can mean more interest. But if you can wait for your vehicle loan, try to and build a history of on-time payments. A low debt-to-income ratio also indicates to lenders that you are able to manage your financial situation. Make a strong financial case for lenders to get a good deal. The most important thing to remember is

Work on improving your credit score before applying to qualify for an attractive interest rate on your auto loan.

4. Choose more than one lender Ccomparing lenders is just as critical as comparing cars to get a fair bargain. There are a variety of lending options to choose from. include: If you’ve got a low or zero credit, then you might be eligible for a first-time buyer’s loan by local credit unions. You’ll need to become a member of the credit union in order in order to qualify for loans So, inquire about how to join prior to proceeding. Large banks: Customers with an established relationship with a traditional bank might be eligible for an auto loan. As a first-time buyer, you may face higher rates. Online lenders: Online lenders typically provide less stringent eligibility requirements than traditional banks. This is a good thing for those who do not have credit history or a high score, however, you may expect a higher rate of interest to mitigate the risk of default posed by the lender. Marketplace lending: The platforms feature an extensive network of lenders. The application you submit is shared with the community so that you can view potential loan deals with lenders that may be a suitable match. Captive lenders: You could obtain financing through a or the finance company belonging to the auto manufacturer. They often feature auto loan programs for currently enrolled students and recent college graduates. Each lender has different rates and methods to determine who will get which terms. It is essential to research and make an application with a variety of lenders. This will allow you to determine what you can qualify for, how much you are able to spend, and how much you can expect to pay every month. The most important thing to remember is

Shopping around helps ensure your get the most competitive price on auto loan.

5. Get preapproved Shopping around has additional benefits that is it could end up in a period that can last as long as 30 days. If you apply for preapproval, the lender will issue a soft inquiry that won’t have an impact on the credit rating of yours. It gives you time go to the dealer and automobiles without the stress of needing to secure financing. Preapproval gives you the upper hand in negotiations. Dealer financing can be expensive since dealers mark up their rates to gain profits. But when you head to the dealer with a preapproval letter and a preapproval letter, you might be in a position to negotiate a great price on financing in-houseshould that be the way you’d like to pursue. Some dealers will also provide the choice between or low-interest financing. If you have already been able to get unbeatable rates with another lender, your option is simple: reward yourself with a rebate. Key takeaway

Being preapproved can help narrow your list of potential lenders and minimizes the impact to your credit scores.

6. Decide between new, used or leased Lenders provide different rates on automobile loans for . Lessors have their own method of calculating the monthly payment known as the factor rate and you must study the factors prior to making this choice. If you’re planning on purchasing the latest model, be aware that they generally offer lower rates across spectrum. However, brand new vehicles are also more expensive and are likely to lose value faster through depreciation. Therefore, even though you’ll be paying more on a used vehicle however, you could still save money. The most important thing to remember

New vehicles generally have more competitive loan conditions than used vehicles however, your total cost will be more expensive.

7. Find specials offered by the manufacturer. Many manufacturers offer first-time car buyer programs. Some even offer to college students as well as recent grads. If you’re planning on buying a new car, have the income as well as credit score to back it up, and you are looking for financing in-house it is sensible to check if you could make a profit. Manufacturers also offer rebates, and special leases on new models. Keep an eye out for these. You’ll be limited in what you can buy and how you can afford it. But if you already have a clear idea of what you want and excellent credit, manufacturer specials could help you save money on the first car loan. The most important thing to remember

Talk to the dealer to determine whether you are eligible for financing incentives if you’re buying a new car.

8. Utilize a co-signer, or co-borrower. If you don’t have stellar credit, a could be able to get a great deal. The lender will take into consideration both scores of your credit in deciding whether or not to finance your car. A to the vehicle but will be liable for the loan in the event that you are unable to make timely payments. But, a co-borrower shares ownership of the car and is equally responsible in this loan together with the borrower. Regardless of which you select the person you choose to borrow from, they must be able to demonstrate excellent credit and consistent source of income that meets the lender’s minimum requirements for approval. The most important thing to remember is

Co-signers or co-borrowers can improve your odds of approval and enable you to secure an even better rate on an auto loan.

9. You should have a substantial down payment Once you know what you can afford to spend, start that’s at least 20% of the car’s total cost. If you’re unable to afford this amount, you should aim for an amount of at least 10%- or whatever you can be able to. Try Bankrate’s tool to find the right amount for you. It may be tempting to buy a more expensive car however, first-time buyers — as well as every car purchaser should use a down payment to lower the amount they must finance. A larger down payment improves your odds of getting a great interest rate, and also lowers your monthly payment and shrinks the amount of interest you’ll have to pay throughout the loan’s duration. What’s the most important takeaway

A larger down payment could allow you to qualify for better loan terms. Additionally, your monthly payment will be less expensive.

Next steps The most important thing to do to getting a good deal on your first auto loan is to stay open to shopping around and be patient. You can get the best rate when you compare lenders, putting aside the cost of a downpayment, and working on your credit score. Learn more

SHARE:

Written by

Allison Martin’s work began over 10 years ago as a digital content strategist, and she’s since been featured in a variety of top financial publications such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

Edited by Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate since the end of 2022. He is a fan of transparent reporting that allows readers to confidently get deals and make most appropriate choices regarding their finances. He specializes in auto and small business loans.

Similar Articles: Auto Loans 4 minutes read Mar 02, 2023

Auto Loans 4 min read Sep 21 2022

Auto Loans read in 4 minutes Sep 19, 2022

Auto Loans 4 min read Aug 04 2022

About

Help

Legal Cookie settings Do not share my information with anyone else.

How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the placement of sponsored products and services, or by you clicking on certain hyperlinks on our site. This compensation could impact how, where and in what order items appear within listing categories in the event that they are not permitted by law. We also offer mortgage, home equity, and other home loan products. Other elements, such as our own proprietary website rules and whether the product is available in your area or at your self-selected credit score range could also affect how and where products appear on this site. While we strive to provide the most diverse selection of products, Bankrate does not include specific information on every financial or credit product or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |

|

(c) 2023 Bankrate, LLC. A Red Ventures company. All Rights Reserved.

If you liked this article and you would such as to obtain additional facts regarding payday loan online same day kindly see the web-page.