Five tips on negotiating your car loan rate

09 Mar 2017

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Everyone wants to get the best interest rates for themselves, and why do some people obtain better interest rates than others? Here are some tips to help you negotiate the best car loan interest rates for yourself.

Shop Around Without Enquiring

Don’t let the salesperson tell you that the offer he has provided is the best in the market for your circumstances. Each car loan provider assess their interest rates differently, where some lenders will base their interest rates on the applicant primarily, where other lenders will base their interest rates on the car primarily, so depending on the vehicle you are purchasing and the overall strengths in your application, there may be a better deal out there for you, if you shop around.

Get Assistance With Your Car Loan Shopping

There are many reputable car loan brokers that have a range of lenders they have access to. The finance brokers can usually do in a few hours what may take you weeks. Because of the number of loans they write, they may even get you lower car loan interest rates than what you can obtain yourself. A car finance broker can also take the guess work out of it for you, by understanding all their lender’s different policies and guidelines to give you the best chance of getting it right the first time and creating only one enquiry for your car loan proposal.

Do Not Apply Unless You Are Committed

Each time you apply to a lender, they are required to view your credit file, and in order to do so will create an enquiry on your credit file. The more enquiries in a short period of time, the lower your chances are of getting the best deal, and even quite a few lenders may decline the loan due to excessive loan enquiries.

Get it right first time and don’t apply unless you are 100% committed and satisfied with that quote.

Ask For a Better Car Loan Interest Rate

The old saying goes “if you don’t ask, you don’t get”, well this can apply to car finance too. Some car loan providers may not offer you the absolute best deal they can achieve upfront, so always ask if the rate can be lowered and if it’s the best rate they can offer you. In many cases, they would rather lose a little profit from your deal than lose you as a customer overall. It's not like they are going to show you the door just because you're negotiating your interest rate.

Commit Some Savings To Your Car Purchase

The lower the borrow amount against the vehicle you’re purchasing, the lower the risk to the lender, which not only may open up some options in regards to which car loan providers will approve your loan, but with some lenders, you may get a discounted car loan interest rate, as you are committing some cash deposit towards the car and not borrowing the whole amount.