Buying a car is rarely a straightforward process. From choosing a specific car model to negotiating the final price, the whole ordeal is often fraught with anxiety. Even getting financing can be overwhelming. And this is all even truer if you go to a dealership unprepared.
But with a little effort you can walk out with the car of your dreams at a great deal.
Otherwise you could be paying a lot more than you need to. The key to getting the rates you want on an auto loan for your next vehicle in Washington is knowing how to negotiate. You could save a lot more money in the long run.
But most individuals fail to do so and even fall for some of the most common financing scams. This doesn’t mean that all dealerships are sneaky. It just means that being prepared goes a long way.
Auto loan for Washington currently stand at 3.24% for Bank of America and 2.49% for U.S. Bank for 48 month terms. The rates vary on a number of factors including your credit history and employment.
The following are five tips to help you get the lowest rates on your next auto loan in Washington.
Know what your credit score is
Lenders always look at your credit to determine if you are financially able to repay the loan. Before getting financing it is strongly recommend to first review your credit report. Any errors should be immediately addressed otherwise it could hurt your ability to obtain financing.
In some cases it might make more sense to hold off on buying a car until your score improves. Focus on improving your credit by ensuring all payments are sent in on time and reducing the amount of debt as much as possible.
Consider other financing options
Even before you visit your dealership, you should always seek other financing options. Start by applying for auto loans with your bank to determine what rates you can qualify for. This gives you much more leverage as it means you can compare these rates with what the dealership offers.
And if the dealership offers a higher rate you have two options: You can either negotiate for them to match the rate or haggle them to go lower.
Negotiate for lower rates
Dealership financing could very well be your only option. But even if it is you can still negotiate for a lower rate. You just have to be willing to ask. There could also even be financing incentives available depending on the vehicle. Qualifying for these deals may not be possible depending on your credit but it doesn’t hurt to ask either. Washington state has a diverse range of credit types, so they have experience helping people from many different situations.
Make a higher down payment
Putting down at least 20 percent of the total purchase price is ideal. The more you can put down on Washington State auto loans, the better rates you will be able to qualify for. Lenders will be more comfortable with offering financing and doing so gives you even more negotiating power.
Keep the loan term short
In Seattle and its surrounding areas loan lengths are typically between 24 and 84 months. The longer your loan terms are, the more in interest you will pay. Shorter loan terms means not only paying your loans at a faster rate but it also means paying less in overall interest. Be sure to thoroughly examine your financing options before committing to anything.