When it comes to car shopping, finding the right loan can be just as important as finding the right car. It’s not as easy as simply showing up to the dealership. To get the lowest interest rate, you’ll want to shop around for an auto loan to see what kind of financing is available to you. Dealerships often mark up the interest rates on loan offers from lenders, and that can leave you paying more for the same car.
The good news is that it’s completely avoidable if you’re willing to shop around for your loan and get pre-approved before you start shopping at the dealership. To shop for the best rate, you’ll want to look at several different lenders and see what each will offer you. Once you start getting rate quotes, you’ll have two weeks to gather all the quotes you’d like without multiple inquiries hurting your credit score — the credit reporting bureaus count all of those inquiries as one within that period.
Having a pre-approval for a car loan can give you better bargaining power and peace of mind that you’ll have the lowest interest rate possible. As you start shopping, keep in mind that your local small bank or credit union could also be a great place to get a loan — these institutions often offer lower car loan interest rates than big banks, but are usually limited to a relatively small geographic area.