With people trading cars in faster than ever getting a cheap car loan is an important thing to most people. Even if you don’t change cars faster than you change shirts you would still want to find a cheap car loan when you’re ready to trade in your reliable old car for a wonderful new model. The best advice I can give you when searching for a cheap car loan is to take the time to research and compare loan options from several auto lenders before committing to a loan. With so many lenders out there competing for your business it’s actually not too hard to find a cheap car loan.

Now on to the details of finding a cheap car loan:

Do your auto loan research upfront

Like I said, there are plenty of lenders out there that want to finance your next car purchase. It really is a buyer’s market, especially with the current economy and you’re not obligated to finance your car loan with any specific lender, so feel free to refuse an offer if you don’t like it. You really need to get quotes from several auto lenders and then compare them side by side to see which one has the best terms and rates. Look at everything, including the fine print. This may take a little time, but the results are well worth it. And if you go online to search for cheap car loans you can speed up the process substantially.

Attain and keep a good credit rating

A good credit score will make it easy for you to negotiate the best possible interest rate. If your credit rating is currently a bit weak you may want to wait a few months before buying a new car and take that time to strengthen the credit report.

Increasing your credit score does take time, but you can do it. Making sure all of your payments are on time is the first step towards a higher credit score. If you can also pay off some loans or credit cards that will help, but don’t close the accounts after paying them off, especially if they are older accounts. In general you’ll find that the higher your credit score the lower your interest rate and the cheaper your car loan will be.

Have a large car loan down payment or trade-in

It makes sense that the less money you borrow the lower your monthly payments will be and you’ll also pay less in interest over the life of the car loan. Always do your best to get the most possible for your trade-in and even better have cash to put down on the new car purchase. In some cases you may benefit from selling your old car privately rather than trading in and using that cash as a down payment. This will depend on whether or not you can get more money for the car privately, but it’s worth a shot.

Get auto financing before you go to the car dealer

You dealer will offer you financing, usually through the finance arm of the auto company whose car you’re buying. Now, this offer may be fine, but in most cases you can get better rates from a credit union or bank. If you already have auto financing before you go car shopping you’ll be in a much stronger position to negotiate financing and even the price of the car itself. This way you’ll get both a cheap car loan and a cheaper car price.

Overall, getting a cheap car loan isn’t too difficult if you’re willing to put in some legwork of your own. Take the time to shop around for a car loan and get prequalified and next time you go car shopping you’re sure to get both a cheap car loan and a cheaper car price.

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