As you look ahead to the new year, you may find yourself dreaming of upgrading your current set of wheels for something newer, sleeker, and more technologically advanced. The good news is, 2024 brings some of the lowest auto loan interest rates in years. Whether you have your eye on an eco-friendly electric vehicle, a safe and spacious SUV for your growing family, or simply want to trade in your old clunker for a newer model, now is an excellent time to get approved for an affordable car loan.
With interest rates at historic lows, you can lock in substantial savings and drive off the lot with your dream vehicle. Read on to discover the top 5 auto lenders offering the lowest rates so you can cruise into the new year with a shiny new ride. The open road awaits!
Ring in 2024 With a New Car and the Lowest Interest Rates
Ring in 2024 With a New Car and the Lowest Interest Rates
Low Rates Mean Big Savings
As 2024 begins, interest rates on new vehicle loans are at historic lows. According to recent surveys, rates for 60-month new car loans are averaging between 3 to 5 percent. At these rates, you’ll pay hundreds less in interest charges over the life of the loan. For example, on a $25,000 loan at 3 percent, you’ll pay about $1,500 in interest over 5 years. The same loan at 6 percent means $3,500 in interest—more than double!
Lower rates translate into lower monthly payments or the ability to purchase a more expensive vehicle while keeping payments the same. Either way, you win. With more buying power, you can get extra features and upgrades on your new ride.
Shop Multiple Lenders for the Best Deal
Don’t assume your current bank or credit union offers the lowest rates. Auto manufacturers, credit unions, banks, and online lenders are all competing for your business. Check with at least 3 to 4 lenders to compare options. Provide the details on the specific vehicle you want to finance to get accurate quotes. Look at both the interest rate as well as fees charged by different lenders. Some may advertise a low rate but make up for it with high origination or prepayment penalties.
Boost Your Credit to Boost Your Rate
Interest rates are directly tied to your credit score. The higher your score, the lower your rate. Check your credit reports and scores before you start shopping. Look for any errors and dispute them to get them corrected. Pay down balances on credit cards and other revolving credit to improve your credit utilization ratio. The closer you get to a score of 800, the closer you’ll get to the absolute lowest rates.
Following these simple tips at the start of the new year will put you in the driver’s seat to save big on your next auto loan. Lower rates, more buying power, and a solid credit profile all add up to huge long-term savings. Start your search today to take advantage of the lowest rates of the year and drive off the lot in your new set of wheels.
Compare Loan Terms From Top Lenders to Find the Best Rate
To get the lowest interest rate on your new car loan, you’ll want to compare offers from several top lenders. Interest rates can vary significantly between banks and credit unions, so shopping around is key.
Check Your Credit Score
Your credit score is one of the main factors that determines your loan terms and interest rate. Check your score before you start applying for preapproval. If your score needs improvement, take steps to increase it by paying down balances and checking for errors. The higher your score, the better rate you can expect.
Compare Preapproval Offers
Get preapproved by a few lenders to compare their offers. Preapproval means you submit a loan application to see what rates and terms you may qualify for before you choose a vehicle. Look for the lowest APR (annual percentage rate), which factors in interest and fees. Some of the top auto lenders include:
•Bank of America – Large national bank with competitive rates for good credit
•Chase – Major bank that often runs new car sales and offers attractive financing deals
•USAA – For military members and families; typically very good rates •Local Credit Unions – Don’t overlook credit unions; they’re non-profits and often have the lowest rates
Negotiate the Best Deal
Once you have a few good preapprovals, you can find a vehicle you want to purchase and negotiate confidently with the dealer. Let them know you have preapproval from other lenders with lower rates. They may match or beat the competing offers to win your business. Be willing to walk away if they won’t budge on price or financing.
Following these steps and taking the time to explore all of your options will help ensure you get the most affordable financing deal on your new car. Drive off the lot knowing you’ve saved money that you can put toward enjoying your new wheels!
Tips to Get Your Dream Car in 2024 While Saving Money
Research Loan Options Thoroughly
To get the best deal on your new car’s financing in 2024, do your research on various lenders and loan types. Compare interest rates and terms from banks, credit unions, and online lenders to find offers that fit your needs. Consider both secured loans like auto loans as well as unsecured personal loans which typically have higher interest rates. Shop around at several places to get preapproved before visiting dealerships. Knowing your budget and preapproved loan details will give you more leverage to negotiate the best overall price for your new vehicle.
Improve Your Credit Score
A good credit score is key to qualifying for the lowest interest rates on a new car loan. Check your credit reports and scores to find any errors or ways to improve your rating. Pay down revolving credit card balances to lower your credit utilization ratio. Make all payments on time going forward. If needed, you may want to take more time to build your credit before applying for an auto loan. Even slightly higher scores can mean thousands of dollars in interest savings over the life of the loan.
Make a Significant Down Payment
Putting down a sizable down payment, like 20% of the vehicle’s purchase price or more, will lower your loan-to-value ratio and help you get approved for a lower interest rate. It will also mean paying less interest over the lifetime of the loan and often a lower monthly payment. If you have a trade-in vehicle, use its equity toward your new car’s down payment. Consider selling unnecessary belongings online or at yard sales to come up with extra money for a down payment. The more you put down, the better deal you can get.
Negotiate the Best Deal
Once you’ve been preapproved for financing and have selected a new or used vehicle that fits your budget, you’re ready to head to the dealership to make a deal. Do some research on the specific make, model and trim level to determine a fair price range. Don’t share the details of your preapproval or maximum budget with the salesperson. Be willing to walk away to get the best negotiated price on your dream car. With the right preparation and negotiation skills, you’ll be driving off the lot with a great new ride at a payment you can afford.