How do you negotiate a car loan interest rate?

What are some ways that I can negotiate a car loan interest rate? I’m preparing to buy a new car and I want to make sure that I get the best deal on the loan so I don’t get behind on my payments.

Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good for you for doing your research! Knowing what to expect will help you negotiate when buying a car and will help you get a better rate.
Here are a few tips that can help when negotiating a car loan interest rate:
  • Check your credit. If you have a high credit score, you’ll probably get a better interest rate. Improving your credit score before purchasing a vehicle can help you when negotiating loan terms.
  • Get a cosigner
    if you’re worried that your credit score might negatively impact your interest rate.
  • Do your research first. Shop around and figure out what rates other lenders are offering, then use those numbers in your negotiations.
  • Negotiate the price of the car rather than the interest rate. Many dealerships will allow you to make a counteroffer on the price of the vehicle before purchasing it. If you can lower the price of the car, you’ll pay less in interest in the long run.
  • Make a large down payment
    so that you have a lower outstanding balance that you’ll need to pay interest on.
Keep in mind that your loan isn’t the only expense you’ll be taking on when you purchase a new car; you’ll need to find a new car insurance policy, too! The
app can help you find the best rates available to you in just a few minutes. Answer some quick questions on the app, pick from a comprehensive list of competitive quotes from more than 50 top providers, including Nationwide, Allstate, and Travelers, and let Jerry do the rest.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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