How can I get the lowest used car financing interest rate?

Securing the best interest rate on a used car loan requires some planning and research. Follow these steps to help you to maximise your chances of getting the best interest rate. First, maintain a good credit score. This helps you receive the best interest rate because lenders prefer to lend to borrowers with a proven record of repayment history. Check your credit report for any mistakes and clean up any outstanding debts. Having a steady stream of income and a solid job history can help as well.

Pick a newer car or an automobile that has a certified good resale value, as lenders view these as a lower risk and they might offer lower interest rates. If possible, put down a bigger deposit, which lowers the risk and in turn, you could negotiate for a better deal. Be sure to compare loan offers from a few lenders, which often include banks or finance companies. If you are in a good financial position to obtain a used car loan, do not hesitate to negotiate with the lender.

Timing your application can also be an enticing way to lower the interest rate on your used car loan. Lenders may provide a special offer or lower interest rates at the end of the month, quarter or during a festive time. Make sure the lender you are requesting a loan from gives you the same treatment every time. Once you build a relationship with your lender over a period of time, you will have more bargaining power with your lender, when requesting for a lower interest rate. Always read the fine print and clarify terms prior to signing a loan.