Financing a New Car

If you are looking to buy a brand new car, you probably are getting some sticker shock as well.  Prices for new cars can be quite expensive, ranging from about $15K all the way up to $30K for moderate passenger cars.  And while it is relatively easy to purchase a vehicle, for many buyers financing is a must.  Here are some tips for acquiring financing at lower interest rates when purchasing your next new vehicle.

Dealerships Generally Have the Best Interest Rates
Generally speaking, new car dealerships have the lowest interest rates when purchasing a new car.  Since dealership lend lots of money, they usually have large lines of credit that offer them the ability to get money for cheap- and they then pass on the savings to you.  While you can always go to your local bank or credit organization, you might be surprised that interest rates will be higher.

Trade in Your Old Car
Since many new car loans require some sort of collateral, by trading in your old car, you not only have a down payment which cuts down the total cost of the new vehicle, but also gives the bank some collateral- helping you to save more on a loan.  In comparison, if you bought a vehicle with no money down, banks may be wary and charge you a higher rate.

Put More Money Down
One of the best ways to get a better interest rate is to lower the risk to the banks- specifically putting more money down.  The more money you put down on your new vehicle, the better the interest rate will be.  If your new vehicle costs $20K new and you put down $10K, the bank sees this as a low risk opportunity and you should be able to get one of the best interest rates available.