If you are someone about to begin seeking out a loan for the purchase of a new car you are going to see that there is a wide array of interest rates being offered. Why are new car loan rates all over the map? How is it that one person can get a loan at 3.9% and someone else is hit with a staggering 6% or more?
Generally all loans are shaped by a few individual factors connected directly to the borrowers. For example, the amount of the down payment, the credit history, and the current income will all have an effect upon rates and the terms offered. Additionally, the shorter the term of a loan the lower the interest rate charged.
Those who are fortunate enough to get the lowest new car loan rates tend to be people with good to excellent credit histories and scores. This is not to say that these are only people in higher income brackets because that is not the case, it is simply a matter of a consumer having no history of late payments, maxed out credit cards, or defaults on any bills or debts. A “clean” report coupled with a high score is usually the simplest way to get the best rates.
Additionally, the borrowers that get the best rates tend to also have a bit of cash to offer as a down payment on the loan, and they might also elect to use a much shorter term, such as three years, … READ MORE >>>