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How do you negotiate a good interest rate on a car loan?

What can I do to negotiate a good interest rate on a car loan? I know that there is some haggling involved in car buying and that makes me kind of nervous. How do I negotiate?

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Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The car buying process can be overwhelming, especially when you need a
car loan
. Here are a few ways to successfully negotiate the interest rate on a car loan:
  • Improve your credit. Credit scores influence a loan’s interest rate, so improving your credit is one of the best ways to get a better rate. If your credit is poor, you can also
    get a cosigner
    with excellent credit to help you get better terms.
  • Offer a large downpayment. Many lenders will lower the interest rate on your loan if you can make a large downpayment. If possible, save up before you purchase your new car.
  • Negotiate the price of the car. If you finance your car through a dealership, you can try to negotiate the price of the car itself rather than the interest rate. If you can get a lower price on the car, you’ll pay less in interest over time.
  • Do your research. Shop around before committing to a lender! That way, you’ll know what kind of interest rates to expect. You can ask the lender for a better rate based on what’s available to you or if you find a lower rate elsewhere.
While you’re shopping around for the best loan rates, take a moment to shop for the best insurance rates for your new vehicle. The
Jerry
app makes it quick and easy to find the best rates available on the insurance coverage you want! Just download the app and answer a few questions to see a comprehensive cross-analysis of the best car insurance policies that work for you.
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