Differing car loan rates for the same car?

Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Dear Driving for Dollars,
I have been car shopping and I visited two different dealerships, inquiring about the exact same car — same model, engine, options, etc. Each dealer gave me a different monthly payment on a five-year loan. Why? Shouldn’t it be the same?
— Heather

Dear Heather,
I’m not at all surprised you were quoted two different monthly payments on a five-year car loan for an identical new car. There are several reasons why. Assuming the cars were indeed identical, including the paint color, which can sometimes add cost, the dealerships’ salesmen may have been quoting you a different total price for each car, since car prices are believed to be negotiable. In addition, if you have a car to trade in, the salesperson may have been factoring in a different price for that as well, based on differing assessments of its value.

Even if the process of buying a new car with your trade-in was identical at the two dealerships, it’s possible that one of the salespeople quoted you a monthly payment based on a standard interest rate for which you may or may not qualify. Or, if they did an actual auto loan application with a lender, each dealership may have used a different lender, hence getting different interest rates. Or, they may have used the same lender, but one “padded” the interest rate so the dealership could make more on the car loan, which may be legal even if it is underhanded.

Your best bet is to determine what you want and apply for an auto loan yourself. By working directly with a lender, you’ll know the exact parameters of your loan before agreeing to buy a new car.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.

More On Cars: