Auto Financing
September 11th, 2010 | 
Author: 
Before you go into any dealership and embarrass yourself, get a copy of your credit report. There is nothing worse than someone coming into a dealership bragging about how good their credit is only to find out it is not as good as you thought also if you know you haven’t paid anyone in your entire life. DO NOT come in thinking that you have any bargaining power. I have seen one erroneous entry on a credit report change a rate from 6 to 15 percent, just because the consumer had no idea that someone has made an incorrect entry on their credit report.
In my experience this is the biggest issue consumers have when trying to purchase a new vehicle. Contrary to popular belief, the banks and not dealerships set interest rates. You can get a free credit report annually. The three (3) reporting agencies Equifax, TransUnion, and Experian all of which will give you a free copy of your reports. Banks that grant auto loans primarily use Equifax and TransUnion. Therefore these bureaus need to be accurate for you to obtain the best possible interest rate when purchasing your new or pre-owned vehicle. There are 3 things that influence interest rates:
Credit Score Year of Vehicle Term (number of months financed)
Obviously the higher your score the better interest rate you will get. Just as food for thought, a 650 Equifax score is granting rates of around 9-10 percent on brand new vehicles. So if you are looking at an older vehicle and if your score is lower than 650 you should expect no less than a 10 percent interest rate.
Posted in 
Tags: