How to get the best deal on a car loan.

Used to be a real pain in the ass to arrange financing outside the dealership where you bought your new car, so most people tended to let the dealer take care of it. I did that a while ago (six years) and got taken over the coals but my smiling, friendly dealer.

Now you can avoid that easily. Go to web sites like E-loan and Capital One and apply for a car loan. If you get approved they will send you a blank check you can use to buy the car if you decide to take them up on their offer.

According to Wall Street Journal about half of the checks sent out by these web sites are used, which means that the rates were probably better than the dealer’s offer.

Of course the dealer is going to get out his three walnut shells and do his thing (don’t you love buying a car?). Maybe they will lower the interest rate while raising the price of the car. They can be quick.

You want to start by asking them for the lowest price they will give you, assuming that you are going to finance the car yourself. Get that, and your trade in sorted out, and then (and only then) ask the dealer to price the whole deal with his company’s loan. This lets you compare apples to apples.

You must be logged in to post a comment.