Dear Terry, I have received several offers from a certain credit card company for a new car loan and the letters say I'm pre-approved. I am currently in the market for a new car and was wondering whether it is a good idea to apply for an account this way or go to the dealer and let them find me a finance company. I don't want to lower my credit score by applying for new credit. -- GladysmariaDear Gladysmaria, While not endorsing any specific lender, it's always better to go shopping for a new car with your financing already lined up. The dealer gets a commission for setting you up with a loan and the interest rate may not be as good as you can get on your own. Check with your local bank or credit union to see what kind of terms they offer. You can also use Bankrate's online service to compare auto loan rates. Also, keep in mind that if you make several auto loan inquiries in a short period of time it will be viewed as a single inquiry and won't damage your credit score. This week•4 safeguards when co-signing a loan•Should I refinance my loan or pay it down?•Why won't anyone finance my car deal?•Is it best to let the dealer arrange financing?If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter advertisementRelated Links:7 best off-to-college carsNational auto loan averagesWhat changes auto loan rates?Related Articles:All new cars for 20105 steps to 'clunker' dealTake the 'cash back?'
Dear Terry, I have received several offers from a certain credit card company for a new car loan and the letters say I'm pre-approved. I am currently in the market for a new car and was wondering whether it is a good idea to apply for an account this way or go to the dealer and let them find me a finance company. I don't want to lower my credit score by applying for new credit. -- Gladysmaria
Dear Gladysmaria, While not endorsing any specific lender, it's always better to go shopping for a new car with your financing already lined up. The dealer gets a commission for setting you up with a loan and the interest rate may not be as good as you can get on your own. Check with your local bank or credit union to see what kind of terms they offer. You can also use Bankrate's online service to compare auto loan rates. Also, keep in mind that if you make several auto loan inquiries in a short period of time it will be viewed as a single inquiry and won't damage your credit score.
If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter
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