Whether you’re buying a new or used vehicle, looking for the best auto loan rates is a top priority. With a typical term length averaging 5+ years, it’s no wonder a low interest rate is important to car buyers! But how do you get a good interest rate? And where’s the best place to get it?Â
We break down the surprising options.
Bank Financing
When it comes to auto financing, your first thought might be to go to your bank. And that’s still a good option. Banks have a long, successful history of providing auto loans to consumers.
Typically, you get a preapproval letter for a loan before going to a dealer. You can then take that letter with you to the dealer showing the amount you are authorized to buy.
This saves time when finalizing the contract. Before approving your application, the dealer will then run what is called a “hard credit check” to review your full credit report.
Your auto loan interest rate will be determined by your credit report because it’s at the heart of every car loan. If your credit report is less than stellar, you will pay a higher interest rate. If your credit report is good, then you’ll pay a lesser interest rate.
Options on Auto Loan Rates
There’s another factor in working with a bank for a car loan. If you’re buying a used car that’s older, they may not be willing to finance it. Banks are not in the auto business, so they have a narrower view of what is acceptable to loan.
A second consideration is the length of time it takes to get the car loan. As a third party, the dealer must reconcile both the bank’s paperwork as well as their own. That means it will take a little longer to get the loan.
Dealer Financing
For many years, consumers steered away from dealer financing because Harrisonburg car dealers were thought to have higher interest rates.
Nope.
Here at Joe Bowman Auto Plaza, there are many advantages to pursuing a car loan with us. First of all, dealer financing works the same way as bank financing. The difference is, the dealership works with you directly to find the right loan for you.
For the loan application, we will run a hard credit check, just like your bank, to determine your credit score. This is also an indicator of the loan rates you’re eligible for.
As an example, according to MSN Money, the breakdown for possible new car loan interest rates typically look like this:
• Excellent credit score 850 – 740: 3.2% interest rate (on average)
• Average credit score 739 – 680: 4.5% interest rate (on average)
• Sub-Prime credit score 680 and below: 6.5 – 12.9% interest rate (on average)
Then, we shop our extensive inventory of financial institutions to find the best fit for you. As with all financial lending institutions, the better your credit score, the better your interest rate will be.
Another advantage of financing through our Harrisonburg dealership is that the process is generally quicker. Without a third-party involvement, there is no additional paperwork to review and approve.
When a local lending institution handles the loan, both the dealership and the bank have to process the paperwork. There is a delay in loan approval simply because there are more hoops to jump through.
Choosing to finance your vehicle through our dealership means:
• You get the same opportunity for a competitive interest rate that you would with a bank
• There is less time involved in processing the loan
• You get in your new vehicle more quickly
Here at Joe Bowman Chevy, we also finance high mileage and/or older vehicles all the time! You get the same great loan application process as with new cars or used vehicles with less mileage.
When You’re Ready to Buy
When it’s time to let go of your old vehicle, stop by Joe Bowman Auto Plaza. We have an excellent inventory of cars, trucks, and SUV’s.
Once you find the vehicle that’s right for you, talk to us about dealer financing. We think you may feel the same way as Walter Cox, and you’ll love our auto loan rates, too!
I bought a 2013 GMC Sierra from Derrick. He made it simple and easy with this purchase. He's very knowledgeable and an all around GREAT guy. This was the fastest I've ever bought a vehicle. 3 hours total. Highly, highly recommended.
