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How to get the best auto loan quotes

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The key to getting a good deal on an auto loan is shopping around. You’ll want to compare rates from multiple lenders — as well as fees and other costs — to ensure you select the best quote. Your income, current debts and credit score will all play a role in what you qualify for.  

So don’t rush into a loan. Careful preparation could help you save thousands over the life of your loan. 

6 steps to get the best auto loan quotes 

Auto loans are a big financial commitment. To keep things under budget — and still snag your dream car — follow these steps when searching for quotes. 

1. Review your credit report and score ahead of time 

This first step is crucial. If you don’t already know, check your credit score before you start applying. This will guide you toward lenders you qualify for — and prevent rejections.  

It will also help you understand the potential auto loan rates you may receive. If your credit score is on the higher end, you’re more likely to get lower rates. Likewise, a lower credit score, or a history of missed payments, may result in higher rates. 

Either way, reviewing your credit report and score will help you choose lenders. And once you know how much your potential monthly payment might be, you can also find cars within your budget. 

2. Get quotes from lenders you already work with 

Already have a mortgage or personal loan? A long-term established relationship with a bank or credit union? Use these to your advantage. 

Lenders you have a positive history with may take it into account when you apply for an auto loan. This could mean an easy application process, but it could also result in lower rates. It’s not guaranteed, of course, but borrowing from a lender you already use may mean you pay a little less in the long run. 

3. Shop locally before going to a big bank 

Local banks and credit unions are a good starting place if you don’t already have a regular lender. Big banks advertise lower rates, but they’re harder to qualify for. Local lenders usually have less strict criteria, like income levels and credit scores, than their national counterparts. 

The downside is that it may mean a waiting period. Some credit unions and small banks require you to open an account. Then you may need to wait a few weeks to a few months before you can apply for an auto loan. 

This isn’t always the case but review the fine print to make sure. If you’re not in desperate need, it’s likely worth the wait to make a more budget-friendly decision. 

4. Apply with multiple lenders 

While you should certainly start locally, don’t limit your options. An auto loan will only count as one inquiry on your credit report — even if you send out applications to dozens of lenders. But this is only true if you apply within a 14-day period. 

The more lenders you submit applications to, the more flexibility you’ll have. This is the best way to ensure you get a solid quote on an auto loan. If you’re vying for a certain loan amount or a competitive interest rate, applying with multiple lenders is the surest way to get there. 

Many lenders also offer 30 days of preapproval to shop around with. So, once you apply, you’ll have time to pick the best option for your finances and scope out dealerships for the right car. 

5. Review fees thoroughly 

It’s not all about interest rate or monthly payments. Lenders may charge additional fees — like origination or prepayment fees — on a loan. This can mean less money to spend on a vehicle or a penalty if you decide to make extra payments toward principal. 

Other fees, like late payment fees, are also important. Consider what other expenses might contribute to the cost of your loan when you receive a quote from a lender.  

6. Negotiate with the dealership 

Once you’ve received quotes from lenders, see what the dealership has to offer. Be prepared to reject add-ons like gap insurance or extended warranties. Instead, try to get to the meat of the loan: Interest rate, fees and total cost should be at the forefront of your discussion. 

Dealerships tend to upcharge on interest to make money. But sometimes, dealerships are able to score you a more competitive rate — if you already have financing lined up. If you’re offered a better quote, there’s no reason you shouldn’t take it. And if the dealer can’t match it, you won’t be pressed to accept a bad loan. 

Don’t ignore other parts of the car-shopping process 

Of course, a good quote isn’t the be-all, end-all of buying a car. There are a few other ways you can cut costs and still drive away with a deal. 

  • Research local dealerships to find the ones with good reviews and extensive inventory.  
  • Compare prices on sites like Edmunds or Kelley Blue Book (KBB) if you’re buying a used car. 
  • Look into current deals and offers from the manufacturer if you’re buying a new car. 
  • Pay attention to differences between trims, like safety features, fuel economy and tech. 
  • Select two or three models you’d be interested in test driving before the dealership. 

The bottom line 

It’s hard to overstate the importance of shopping around for quotes when buying a car. You’re likely going to spend upwards of $20,000 or more — so getting the lowest interest rate possible is worth the effort.  


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