whats the best deal for a car loan?

Call all the credit unions in your area and ask for their rates (if you know your credit score that is very helpful). Unless you plan on buying in the next month or two, don’t give them your SSN and run your credit as this can actually hurt your score). Credit unions typically have lower rates than banks, but call those too and ask for their best terms. For example, with a good credit score, my credit union is offering 3.9% financing on new or slightly used cars for 60 months. Banks in my area are slightly higher (with some quoting their best rate at 9%!) And sometimes they offer specials that are better than that. So it pays to shop around. If you have bad credit or need a 36 month term or something like that then your rates will all be different, so do your budget and really know what you can afford before you get to far along in the process (there are tons of online calculators to help with this).

Absolutely no matter what you do, DO NOT trust the dealer to find you the best rate. They may be honest and reputable and good, but many aren’t. I’ve heard stories of dealers just flat out telling lies to make more $ on their sale….you can read the horror stories at http://www.edmunds.com. The point is, if you are an uneducated consumer who trusts the sales guy, you will likely spend way more then you ever want to. Get pre-approved for a loan through the bank/credit union, and THEN go to the dealership. Don’t tell them how you’re going to pay but don’t be a jerk…just hold your cards close until you’re ready to dance the numbers game. Then see if they can beat your pre-approved interest rate. With 0% financing for some cars in some areas, they may just be able to. However, if you qualify for a 4% loan through the bank and the dealership offers you 0% or 3500 cash back, it might save you money to take the cash back option (again, online calculators will show you your options).

The point is to do your research. If you aren’t prepared, you will lose money. If you do some legwork before setting foot in the showroom, you might just get a car at a price you can brag to all your friends about.

Good luck