How do I know if a car dealer is giving me the best loan rate possible?

I was buying a car for the first time. The dealer reassured me that financing through them was the best way to go. I signed a deal for the loan at 9% APR, not knowing if that was a good rate or not. For future knowledge, how do I know if the car dealer is giving me the best car loan rate?

Answer
“In short, you don’t know if the car dealer is giving you the best rate unless you do your homework. That said, you should never take the dealer’s word for it.
Similar to what you would do with car insurance, you have to shop around. Once you’ve shopped around, you should have enough knowledge to know exactly what a good or poor rate is.
If you have great credit, 9% APR is probably outrageous. You can get a good benchmark for comparison shopping by getting preapproved for a loan from a bank or credit union. Knowing your approved loan amount and potential APR will help you make more informed decisions with a dealership and will give you more negotiation power.
In the future, make sure you look around before you sign a car loan agreement.
The same is true of car insurance. Lenders require full coverage, which can be pricey. Different insurance providers charge different rates, and if you choose the first company you spoke to, you might not be getting the best rates.
The best way to get the lowest rate is to shop around. Try using the free Jerry app to make comparison shopping easy. Jerry compares quotes from the top 50 providers and delivers the best deals to your phone in minutes.”
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Eric Schad
Answered on Aug 10, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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