Having a Good Credit Score Doesn’t Guarantee You a Good Car Financing Rate
Ru Chen
· 3 min read
Buying a car can be an exciting prospect, or a necessary one, or anything in between. Many people turn to getting a
car loan
to finance their vehicle purchase. However, not all loans are created equal. Most of them are created with profit in mind, and certainly not for the borrower.Having good credit doesn’t guarantee that someone will get good rates. If you are stuck in a bad car loan,
refinancing may be a course of action to consider
. 
Difficulties of car financing
According to
Consumer Reports
, Americans are now paying more than they should when getting loans for vehicles. Consumer Reports analyzed nearly 858,000 car loans. These loans were made public as mandated by the Securities and Exchange Commission.
They found that rates varied greatly, even for customers who have similar incomes and credit scores.
Some borrowers with super-prime credit scores, which is 720 or higher, were given loans with a 0% annual percentage rate.
Others with similar scores got loans with APRs over 25%! That is a huge difference.
Even when it’s getting a loan for the same car model, similar customers may get vastly different rates. How in the world could this be possible?
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The trickiness of car loans
One reason for the APR disparity is that in many cases, dealers will try to get away with charging as much as they can.
That is why it can be more important to shop around for the best rate possible. Even if you have a good credit score, you still may end up with much higher rates than you should.
In fact, Consumer Reports found that many borrowers were given loans they could not afford.
According to experts, it is recommended to spend no more than 10% of income on car debt. Lenders and dealers are unlikely to tell customers this when giving out rates. They tend to choose the rates that they think they can get away with.
That is why it is important to shop around for the best rates and not settle on the first loan you receive.
How to save money on car insurance
Buying a vehicle can be a significant financial investment. Car insurance is often necessary to protect yourself as well, but it can be expensive.
Like with everything else, shopping around for the best rates may be a good idea. With insurance though, you can get some quick help to do the searching for you.
Jerry
is the easiest and most effective way to find a car insurance policy that is customized for you.After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to.
Plus, Jerry is completely free to use and saves the average user a whopping $879 a year!
