There are lenders all over the place who appear to be more than willing to offer you a great rate for your car loan. A car loan and doing auto financing is a big ticket item to lenders, and they realize that they are going to make a ton of money in interest, even if they offer you a great program with low interest rates.
Many people put the auto financing part of it on the back burner, thinking that first they need to negotiate and haggle for the best possible price. That car looks so nice sitting on the showroom floor or the dealer's parking lot. It's clean, shiny, it has all the latest high tech gadgets, and it drives like a dream compared to that clunker you have been driving. And that is exactly the way that the car dealership sales person wants you to view it, with images of you in that new car and not thinking about the financing of your new car.
But the reality of it is that this approach, while it is the traditional approach taken by the vast majority of people shopping for a new car, is totally backwards. You can always get the new car, same type, same model, maybe from a different dealership and maybe even getting a better deal on it, but once you have made the mental commitment to purchase the car, the last thing you want to do is to spend time shopping for your best deals on car loans and auto financing. You want to be out driving your new car, not doing mundane things like loan shopping and financing comparisons.
The lenders count on that fact, so they rarely put their best offer out there first. They may make an attractive offer, one that will catch your attention, but they realize full well that you have a new car just crying to be driven, and you want to get this finance stuff out of the way so you can scratch that itch.
Now let's say you take a different approach towards finding the best new car loan financing. You are doing your comparison shopping for car loans and auto financing, and you have not even visited any dealerships yet. You know approximately how much you need to borrow for the car loan, but you are not in a hurry. Now you can compare car loan programs at your leisure, looking at the fine print, and make your best decision as to which program is best for you. It's got the best interest rate, it is for a reasonable length of time, and does not have any penalties for early payments or early payoff.
In fact, you have been pre-approved by the lender you have chosen for a specific amount of money. At this point it is time to go visit the dealerships and start negotiating your best deal on that new car. The fact that you are already pre-approved and have your financing taken care of will tell the sales person that you are serious, and if they don't offer the best deal on the vehicle, there is nothing to stop you from going to a different dealership to make the purchase. In other words, you have a much stronger position from which to negotiate your best price.
If the dealer is sharp, they may offer financing from the car manufacturer, at which point you can compare against what you already have. If the deal is better, there is nothing to prevent you from going that way and not executing your pre-approved car loan. The beauty of it is that now the ball is in your court, and you can make the right financial decision.
Don't ignore online car loan quotes. Online lenders frequently have much lower overhead and are very hungry for your business, and can make car loan offers that many traditional lenders can't come close to. But again, just because it's an online lender does not guarantee it will be better, so you need to do your comparison shopping with care.
