Unlike home loans, credit cards or unsecured personal loans where one interest rate is offered to all customers. Motor financiers often determine their interest rates on a case by case basis for each individual customer. Actual interest rates are not always published and in most cases the best interest rates are not published at all.

So with that in mind here are our top five tips to help you obtain a competitive interest rate.

Employment Stability

An applicant that has stayed with their employer for several years shows commitment and stability, two things financiers look for when they asses your application for a car loan. Of course, there’s not much you can do about this right now, but if you’ve recently changed jobs, this may impact your interest rate when you apply for finance.


When you take out secured car finance the lender is using the car as security for the loan and they want to make sure that you are contactable and the car is easy to locate if they need to repossess it. Moving around every six months may mean the lender asseses you as a higher risk customer and could charge you a higher interest rate. Again, this isn’t something you can rectify overnight, so if you have moved around a lot, make sure you have a good record of your past addresses and a bit of an explanation as to why handy.

Credit File

Keep the enquiries on your credit file to an absolute minimum. Each time you apply for finance a loan enquiry is made on your credit file. A good broker, financier or business manager should be able to provide you with indicitive interest rate repayments without accessing your credit file. And should explain the application process so there are no delays if you decide to proceed with your loan.


The age and type of car you are buying can also have an effect on the interest rate you’re offered. The newer the vehicle, generally the more options with lenders, which may result in a better interest rate. As well as this, how you are purchasing the vehicle could also determine the interest rate, whether it is being purchased through a private sale or a licenced dealership.

Loan to Value Ratio

The amount you are borrowing compared with the vehicle’s market value may be factored in when determining the risk of your application. This can impact both brand new vehicles and loans for used cars. Having a large deposit means the loan amount compared to the value is smaller, lowering the risk to the lender while also demonstrating your ability to save.

These tips may assist you in preparing to apply for car finance and help increase your chances of you getting a comeptitive interest rate. A professional broker with a range of lenders may assist in this process. They can discuss what you are looking for in your car loan and compare with what their panel of lenders are able to offer.