New Car Loan Rates in Harrisonburg: 3 Tips to Getting the Right Financing
It's sleek, has all the gadgets and safety features you could want, and you're loving the projected fuel economy. Now that you're ready to buy a new car, getting the best new car loan rates here in Harrisonburg is a top priority.
And it should be! Your interest rate determines how much you will pay for your new vehicle over the life of the loan.
So, it's no wonder that new car buyers have all kinds of questions about financing! That's why we rounded up 3 of the most commonly asked questions about financing a new car.
We hope it helps you confidently make the right loan decision.
"What is a good new car loan rate?"
Much of your financing rate depends on your credit score. Lenders look at this as a reference point for determining what to charge you for your auto loan.
Why is your credit score so important? Because it paints a picture of you as a person. It says how creditworthy you are. And that's what lenders are looking for, a return on their investment.
If your credit score is low, you're charged a higher interest rate. If your score is higher, then the charge is lower.
According to www.carsdirect.com, here's a snapshot of how your credit score affects how much you'll pay for your auto loan.
• 850 - 740: Excellent - 3.2% interest rate (on average)
• 739 - 680: Average - 4.5% interest rate (on average)
• 680 and below: Sub-Prime credit score - 6.5 - 12.9% interest rate (on average)
As you can see, to get the best interest rate for your new vehicle you want your score to be in the 740-850 range.
To get a new car loan with a very attractive rate, a credit score of at least 713 is needed. However, nearly 20% of car loan borrowers have credit scores below 600. That's according to Experian.
Protect your credit with your financial life! Check it online.
Every US consumer is allowed by law to receive one free credit report every 12 months from the three major credit report companies, Experian, Equifax, and TransUnion. Take advantage of it!
In fact, do it before you start your Harrisonburg new car buying process!
"Who has the better rate, car dealers or banks?"
Both! It's simply a matter of choice. Joe Bowman new car loan rates are very competitive. We have a vast network of lenders we work with, so we can easily compete with local banks.
The difference with dealer financing is that there is no "middle man." We do all the work in house, acting on your behalf to find the best rate and terms possible.
If you choose to use your own bank, that's fine, too. We have an excellent relationship with our local Harrisonburg banks. The loan simply takes longer to process because your bank has required paperwork and so do we.
But the bottom line is this. You can get a competitive rate with either our dealership or your bank. The question is how fast do you want to take ownership of your new car?
The best new car auto loan rates are also determined by your down payment. A large or sufficient down payment such as 20% signals to your lender that your loan default risk is low.
"How do I get 0% APR on my new car loan?"
First, you need to know that 0% APR car loans are usually only offered by auto manufacturers. Banks and credit unions don't participate in these promotions.
You'll want to go to car manufacturers' websites and look through their current promotions. Usually, these types of loans are offered on particular models and under certain conditions. For example, the manufacturer needs to reduce inventory.
If the manufacturer has the vehicle you want, you'll need to make sure your credit score is in tip top shape. As we stated above, to qualify for a zero interest loan, typically credit scores must be 700 or higher.
If your credit score is higher than that,740-850, you'll most likely have a good shot at getting this type of loan.
One caveat about 0% interest rates. If you have to pay a higher price for the vehicle to get the 0% financing, you may be better off going for a low interest car loan instead.
However, here at Joe Bowman Auto Plaza, you really won't have to do much auto rate shopping at all because we do it for you!
Stop in today to see our new and used car inventory. Then talk to us about financing. We're happy to answer all your questions.