Tips for finding the cheapest auto loans

Low interest rates have captured the attention of homeowners looking to refinance, but this is also a good time to look for the best interest rates on auto loans. Not only are interest rates low on car loans, but dealerships are eager to reduce their inventory of this year's cars to make room for new models.

Determining how much you can spend on monthly car payments can be easier when you compare rates with an auto loan calculator. Most car dealers offer a rebate or a low-interest auto loan when you buy a new car, but you can rarely get a dealer to agree to both. Consider applying for a lower-interest auto loan through a bank or credit union before going to the car dealer, then taking advantage of the rebate offer on the car. Calculate your payments based on the price of the car, the amount of the rebate and the interest rate on the auto loan.

Many consumers lease new cars rather than buying them with loans. Leasing typically results in lower monthly payments and requires the consumers to meet certain conditions in the lease contract. A calculator can help you make the best decision for your needs. Consider how many miles you typically drive, whether you are careful about car maintenance and if you'll want to customize your car before you choose between leasing and financing your car.

One of the best ways to take advantage of low interest rates on auto loans is by negotiating with the dealer first on the price of the car rather than your monthly payment. Once the dealer knows your monthly budget, it will be easier for the dealer to tack on a slightly higher interest rate and other fees, and wrap them into the payment.

Doing your homework and comparing interest rates on auto loans from lenders other than the dealer can save you hundreds, perhaps even thousands, of dollars, on your car purchase.

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