Need a Car Loan?
Are you looking for a car loan right now? Want a fast decision time but also want to compare rates between lenders?
- Welcome to Financer.com, our site invites you to use our loan comparison tool above right now to instantly compare and find an auto loan from a real lender that can be a perfect fit for you and your pocket!
Finding the right auto loan can be difficult. There are so many lending options these days its hard to know if you are getting the best auto loan rates. The auto financing industry has flourished with more and more online lenders competing with traditional lenders.
Our network only consists of vetted lenders that have a proven and long history of successful and satisfactory consumer lending. But by all means, see for yourself by using our loan comparison tool above right now!
If you have more questions about what an auto loan is, how you can get one, what the approval process is typically like, how financing works, etc etc, then check our extensive but thorough guide below!
Financer.com’s Guide to Finding the Best Car Loan
Buying a new car can be an exciting experience, but paying cash is simply not an option for most buyers.
This means you’ll likely need an auto loan. There are two financing options for buying a vehicle: direct lending and dealership financing. Below, we will examine both options.
Tip: Use the car loan comparison above and find the best loan rates.
Direct Lending: Get a Car Loan From a Bank or Apply Online
With direct lending, you get a personalized loan directly from a finance company, bank, or credit union. You agree to pay the amount financed for the vehicle purchase, along with interest and any other finance charges over an agreed-upon period of time.
You’ll generally receive a financing check or a wire transfer to your bank to pay for the vehicle and any other items you may have purchased, like a service contract, options, or extended warranty.
- Shop around to find the best auto financing rate
- Allows you to find a lender that suits your payment terms
- You generally receive funds directly into your bank account
One of the benefits of direct lending is that you can shop around and compare several lenders to ensure you get the best auto loan rates before you purchase a vehicle.
You are also able to review credit terms before choosing a loan and buying a vehicle, so you’ll know the interest rate/car loan rates upfront during the loan process.
Finally, because you received the funds directly from the bank, you basically become a cash buyer at the dealership, giving you the upper hand in the negotiation process.
Online Car Loans Are a Simpler and Faster Way to Get an Auto Loan
Today, finding a car loan online is actually pretty easy. We recommend you check out our car loan comparison tool at the top of the page to get an overview on online lenders competing to extend you lower interest rates, lower your monthly payments through auto refinancing, and ultimately help make your car buying experience simple.
Comparing a variety of online car loans ensures you get the best possible deal, as the costs of vehicle loans may vary by thousands of dollars.
Dealership financing is typically the path most buyers take because it’s generally the most convenient at the time. Just think about it, you go to the dealership, choose the vehicle you like, negotiate a price, then the dealership handles all the financing for you.
While it may seem like the dealership is providing the financing, it’s not. The dealership simply shops your credit around to various banks who then offer loans to pay for the vehicle.
The dealer then chooses the loan that they feel is best and by this, we mean the best loan for the dealership. When you enter the contract, you’re entering it with the bank, not the dealership they are simply the middle man for auto financing.
While this may seem great because it’s so simple, there are a few downsides to dealership financing:
- The dealer may present only loans that offer kickbacks
- You’re separated from the rate-negotiation process
- There may be better options that you never hear about
- Car dealers can creatively package loans to make a bad deal seem good
Put simply this strategy is not optimal for you as the consumer. This simply just doesn’t guarantee the best-fixed rates/ low rates, best terms and conditions, annual percentage rates (APRs), etc because it incentivizes the car dealership to use a third-party lender that will also share a profit with the dealership.
Auto Financing Options
Multiple car financing options may also be available at the dealership. For instance, it’s not uncommon for dealers to have established relationships with various finance companies, financial institutions, and banks.
You may be able to benefit from a variety of financing options within the dealership itself but be aware that the convenience doesn’t always give options best. You may have to shop around if you want the best deal.
|Easy Auto Financing Options|
|Online Auto Lenders||Shop around to find the cheapest rates|
|Dealership Financing||Limited finance options|
|Banks and Credit Unions||Cheaper rates but often good credit is required|
Special programs may also be available. For instance, if you’re working with a new-car dealership, the manufacturer may sponsor low-rate loans or incentive programs to encourage buyers to make purchases.
Keep in mind that these programs may be limited to specific vehicles or may come with special requirements. For example, you may be required to agree to a shorter contract length or a larger down payment.
It’s important to make sure you always understand the terms of the offer and how you’re expected to make the loan payment. You may also need a higher credit rating to qualify for these programs.
Consumers should always make a point of shopping around before making a final decision regarding which type of financing is best for their particular needs since car dealerships depend on providing personal loan rates that are competitive compared to their own dealership competitors.
Applying for Car Loan Financing
When applying for car financing, it’s also important to understand the type of information you will need to provide. If you opt for dealership financing, you will usually submit your application through the finance-and-insurance office at the dealership. This will involve completing an application, which will require such information as:
- Social Security number
- Date of birth
- Length of employment
- Income sources
- Gross monthly income
- Income to debt ratio
The dealership will also obtain a copy of your credit report, which contains information about your past and current credit obligations, credit history, including payment history, existing auto loans, balances, credit limits and interest, any relevant data from public records.
Each account’s status will also be included on your credit report, including any overdue amounts and if the account is open or closed. If a creditor has taken any legal steps to collect on a debt, this information will also be included.
- Most dealerships will submit your application to multiple possible lenders, including finance companies, banks, and credit unions, to find an assignee who’s willing to finance your purchase.
Your credit application will be evaluated using various techniques to determine whether you will be approved for a loan with the proper terms and conditions that make car payments or lease buyouts manageable given your current financial situation.
When you finance through a dealer, you will not deal directly with prospective lenders. The decision to offer you financing will be based on an evaluation of your credit score, credit report, your completed application and terms of the sale, including your down payment amount.
BUY RATE: Interest rate that a potential lender quotes the dealer
CONTRACT RATE: The rate which the dealer offers you
If a lender agrees to finance your purchase, it will notify the dealership and give a buy rate, which is the APR the lender is willing to offer. The dealer then comes to you with a contract rate which is the interest rate you will pay, which may or may not be higher than the buy rate.
This is where you want to start negotiating that interest rate to push the rate you are paying closer to the buy rate the dealership received.
Always Compare Car Loan Interest Rates
Consumers should be aware that the interest rate the dealership offers may not be lower than the rate they could get with direct lending.
In many cases, consumers can negotiate the terms of payment and the APR with a dealership. As we mentioned before, the APR that consumers get from dealership financing is typically higher than the buy rate.
This is because the rate includes the amount the dealer is compensated for handling the consumer’s financing and the car loan rates are determined from this additional fee.
If the dealer promotes a discount, rebate or special price, consumers should make sure they know exactly what is available and what the eligibility requirements are for those offers.
Such offers can reduce the vehicle’s purchase price, thus the amount the consumer must finance. Before signing a contract, consumers should always ask questions about ALL terms, including whether those terms are final or subject to change.
5 Questions To Ask an Auto Financing Lender
- What is the interest rate?
- What additional fees are involved?
- What is the total APR?
- What are the contract terms?
- Is there an early payment penalty?
Direct Auto Loan Lenders
Online auto loans are now more common than ever and can help you get the leverage you need to get deeper discounts at car dealerships.
In regard to finding a direct auto lender that can help you with your auto finance needs, you can shop online with the tool we’ve provided above to help you get the maximum loan possible with fair terms and conditions.
Furthermore, because you’re dealing with direct lenders and financial institutions online you may find deals that car dealerships only offer individuals with excellent credit.
Loan amounts can affect the auto loan rates and optimal rates do still depend on your credit.
Online lenders may offer more bad credit auto loan options. Its worth shopping around and comparing rates.
If you are looking to receive an auto loan online, you must also take into account what you’re comfortable repaying every month to your online lender.
Be sure to investigate your loan information and if your application status gets the approval you can expect your vehicle loan to show up in your bank account within days.
A Final Word of Advice on Auto Loans
The purchase of a new vehicle is an important decision. Since many loan terms are 36 months or longer, the financing you choose when buying a new vehicle is also important. This loan will follow you around for the next three or more years, so you want to make sure you selected the right one now.
Financer has taken the burden away from you as a consumer by showing you a network of lenders you can do business with right now.
In addition to that, you can compare auto loans instantly online and be well on your way to finding the funds you need for the car you want.
Alternatively, there are always other lenders but you’re most likely going to have to sift website by website to find a deal. So skip the noise and instantly compare online right now!