Who Has the Best Car Loan Rates?

June 8th, 2021 by
Man and Woman Signing Contract

Glendale drivers looking to purchase and finance a car usually have one common question, “Who has the best car loan rates?” Another question to consider is, “What is a good car loan rate for my current financial situation?” The type of auto loan and the rate you will be eligible for depends on several factors, so read ahead to learn more about auto loans. When you are ready to finance, Rocky's Auto Credit has a team of finance experts to help you find the best car loan rate in Mesa.

Types of Car Loans

There are many different types of car loans available to buyers in Phoenix, and it is important to know what you need for your lifestyle and budget before choosing. Buyers generally finance with a simple-interest secured loan, however, there are options if that is not ideal or feasible. Take a closer look at lending options, and go in to purchase your automobile prepared!

  • Unsecured Loan: A loan that requires no security or collateral and can be obtained for an amount larger than the value of your vehicle.
  • Secured Loan: A car loan that uses the car as collateral to secure the car. It is important to keep this loan in good standing, as your car can be repossessed if you fall behind on payments.
  • Precomputed Interest Loan: This loan requires you to stick to a set payment schedule with the interest precomputed and added to each payment. This means that if you pay your loan off early, you will not save any money. 
  • Simple Interest Loan: These loans calculate interest on a predetermined basis, and if you pay the loan off early or make extra payments you will save money. 
  • Direct Financing: All communication is held between you and the lender.
  • Indirect Financing: This type of financing means that a third-party (usually the car dealership) acts as a go-between or communicator for you and the lender.
  • Military Loan: These loans are eligible to active-duty service members and their spouses and are protected by the military.
  • Pre-Approved Loan: This type of financing means that your bank or credit union issues a blank check for you to take to the dealership or private party.
  • Specialty Loans: There are also lease buy-out loans, No Credit/Bad Credit Financing loans, title loans, private seller loans, and refinancing loans. 

What is the Current Interest Rate for Car Loans? 

What is a good car loan rate? Your car loan’s interest rate is primarily determined by your credit score. Here are the current optimal Annual Percentage Rates per credit score. 

  • 781–850 Credit Score: New: 3.24% and Used: 4.08%
  • 661-780 Credit Score: New: 4.1% and Used: 6.05%
  • 660-601 Credit Score: New: 7.14% and Used: 11.41%
  • 501-600 Credit Score: New: 11.33% and Used: 17.78%
  • 300-500 Credit Score: New: 13.97% and Used: 20.67%

Car Loans: Tips on Negotiating

Most Tempe car buyers use a simple interest secured loan to finance their car. If you use a different type of loan, make sure you spend around two weeks searching for the best Annual Percentage Rate available. Here are a few tips to help you negotiate the best interest rate:

  • Have excellent credit history
  • A solid credit score
  • Get pre-approved first with a good interest rate and negotiate with the dealership for lower interest rates

Secure Your Car Loan With Us Today

Contact us with any questions you may have regarding financing and interest rates, then visit us to score a great deal on a pre-owned car and car loan! You can learn more with Rocky's Auto Credit if you interested in a lease take over.Our expert staff is here to help, and we look forward to working with you to help you find the best loan for your financial needs.

Posted in Financing